Key takeaways

• The overall CPI increased 0.4% in August and 2.9% since August 2024. Core ran at 3.1% year over year
• Food at home rose 2.7% year over year, with cookies up 3.5%. Beef was a standout at 13.9% higher than a year ago
• Energy diverged: electricity rose 6.2% and utility gas 13.8% versus last year, while gasoline fell 6.6%
• Travel costs jumped: airline fares rose 5.9% in August alone
• Markets are leaning toward a Fed rate cut next week as inflation hovers near 3% and labor signals soften

Inflation landed at 2.9% as shelter inched up, electricity climbed, and coffee perked higher. The increase was broad-based across services and select goods, with those three among the more visible movers.

The August Consumer Price Index (CPI) landed at 2.9% year over year, up 0.4% for the month — above July’s monthly pace of 0.2%.¹ Core prices, which exclude food and energy, are running at 3.1% over the past 12 months.² Together, the readings keep inflation close to 3% as the Federal Reserve considers its next move.

What moved the needle in August

Several categories ran noticeably hotter than the 0.4% overall monthly pace. Airline fares spiked 5.9% in August, lifting transportation services and testing late-season travel budgets.³ Car and truck rental prices moved the other way, falling 6.9%.⁴

The energy picture was split. For the 12-month period ending in August, electricity bills ran 6.2% higher and utility gas service jumped 13.8%, reflecting elevated home-energy costs.⁵ Yet energy commodities reduced annual inflation: Gasoline prices were 6.6% lower than a year ago, even as they edged up 1.9% in August.⁶

Shelter inflation continued to cool gradually from earlier peaks. Overall shelter rose 0.4% in August and 3.6% year over year, with rent up 3.5% since last year and owners’ equivalent rent up 4%.⁷ Lodging away from home was up 2.3% for August but down 2.6% versus last year.

At the kitchen table

Grocery inflation remained contained compared with 2022 (food +9.9%) and 2023 (+5.8%), but there were pockets of pressure.⁸ Food at home rose 2.7% year over year and 0.6% in August.⁹ Coffee rose another 3.6% in August, up 20.9% from 12 months earlier. Among fresh fruit, apples rose 3.5% in August and 9.6% since last year; bananas moved up 2.1% for the month and 6.6% since last year. Food away from home rose 3.9% for the year.¹⁰

Cookie prices, meet cookie season

Cookie prices are up 3.5% from last August, but demand remains strong.¹¹ The Girl Scouts have announced a new 2026 cookie called Exploremores — a rocky road ice cream–inspired sandwich cookie with chocolate, marshmallow, and toasted almond crème.¹² With about 200 million boxes selling annually, cookie sales raise roughly $800 million for the Girl Scouts and serve as a learning lab for young entrepreneurs.¹³

Autos and services still matter

Vehicle-related costs continued to shuffle. Used cars and trucks rose 1% in August and 6% year over year, while new vehicles increased 0.3% for the month and 7% since last August.¹⁴ Motor vehicle repair — a sticky line-item in many budgets — jumped 5% in August and 15% for the year, and motor vehicle insurance increased 4.7% year over year.¹⁵

Where inflation is running hotter or cooler than average

Running hotter: Home energy and car upkeep led the gains. Several everyday services also outpaced the average — delivery, garbage collection, veterinary care, tax preparation, and tenants’/household insurance — and on the goods side, coffee (+20.9%) and beef (+13.9%) stood out, with eggs and bacon also higher.

Running cooler: Gasoline and other energy commodities were cheaper than a year ago (−6.6% and −6.2%). Travel and select goods eased as well — car and truck rentals and lodging away from home declined — and electronics such as smartphones and televisions, along with major appliances and household items like dishware and sewing supplies, posted year-over-year drops.

What this means for household finances

• Travel plans: With August airfare up sharply, fall and holiday itineraries may benefit from flexible dates and early bookings, while rental-car costs offered relief in August.
• Utilities: Home-energy bills remain a pressure point heading into cooler months; simple efficiency upgrades and budget billing programs can help smooth seasonal spikes.
• Groceries: Protein-heavy carts are feeling the squeeze from higher beef prices. Swapping in less-expensive cuts and mixing proteins can stretch meal planning.
• Autos: Elevated repair costs could mean comparison shopping on service quotes; insurance inflation has cooled materially from last year’s peaks.
• Rates & debt: With inflation near 3% and the job market cooling, economists widely expect a September Fed rate cut, which could ease borrowing costs over time while slowly trimming deposit yields.¹⁶