Inflation inched higher last month as Americans closed out the summer paying more for both groceries and gasoline.
Consumer prices in August were up 2.9% from a year ago, according to from the Labor Department. That's a sharper annual increase than the previous month, when inflation was clocked at 2.7%.
Prices rose 0.4% between July and August, compared to a 0.2% increase the previous month. Prices for groceries jumped 0.6% while gasoline prices rose 1.9%.
Consumers also saw higher prices for new and used cars, clothing and airfares in August. Stripping out volatile food and energy prices, "core" inflation was 3.1% for the last 12 months.
The Federal Reserve faces a challenge
The continued rise in prices poses a challenge for the Federal Reserve as it weighs what to do about interest rates. Policymakers are widely expected to lower their benchmark rate by a quarter percentage point next week to prop up the . But Fed officials may be wary about additional rate cuts in the face of stubborn inflation.
The August cost of living figures cover a month when President Trump raised tariffs on goods from many U.S. trading partners. The tariffs may have contributed to higher prices for imported goods such as coffee (up 3.6% last month), bananas (up 2.1%) and apparel (up 0.5%).
A federal appeals court ruled late last month that , but they remain in effect pending a review by the U.S. Supreme Court. The high court has scheduled oral arguments for early November.
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