The U.S. annual inflation rate in August fell to its lowest point since February 2021, signaling a further easing of pressure on the cost of goods and services for U.S. consumers.

The Consumer Price Index (CPI) saw a cooler-than-anticipated annual headline print in August, cementing convictions for interest rate cuts by the Federal Reserve.

August CPI Inflation Report: Key Highlights

• Headline CPI inflation fell from 2.9% in July to 2.5% in August 2024 on a year-over-year basis, falling short of the consensus forecast of 2.6% tracked by TradingEconomics.

• On a monthly basis, inflation increased by 0.2% in August, matching both the previous month's reading and expectations.

• The energy index declined by 0.8% in the month, following a stagnation in the previous month.

• The shelter index soared by 0.5% in August, contributing the most to the overall increase in the all-items index.

• Core inflation, which excludes volatile energy and food items, held steady at 3.2% year-over-year in August, matching forecasts.

• On a monthly basis, core inflation rose by 0.3%, accelerating from the previous 0.2% and surpassing estimates of 0.2%.

• In August, several items saw increases, including shelter, airline fares, motor vehicle insurance, education and apparel.

• The items for used cars and trucks, household furnishings and operations, medical care, communication and recreation were among those that recorded a decline over the month.

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