U.S. inflation remains at 3.4% in August report

(The Center Square) – U.S. inflation rose by 0.4% in August for an annual rate of 3.4%, keeping in track with July’s data, according to a new report from the U.S. Bureau of Labor Statistics. 

The index for gasoline rose 3.9% during the month, accounting for more than one third of the monthly items increase. Energy overall increased by 2.1% and the shelter index rose by 0.3%.

The index for food increased 0.1% over the month and rose 0.3% for all items less food and energy.

Over the past 12 months, the energy index has increased by 16.3%, largely driven by rising prices from the U.S. military conflict with Iran.

“America still has an inflation problem,” said Heather Long, chief economist at Navy Federal.

Inflation in July only rose 0.1%, showing a persistent economic nag as global energy markets continue to be affected by the conflict with Iran.

Long pointed out that prices for other inflation indicators also rose in August, a surprising trend that is not often seen.

“Higher gas prices accounted for a third of the increase in August, but shelter, eating out, transportation and new and used vehicles all had significant price increases as well,” Long said.

The price for new vehicles rose by 0.3% in August and 0.4% for used cars and trucks.

Inflation continues to outpace wage growth, Long said. Wage growth in the past year is 3.1%, according to the BLS.

“Many American households have to belt tighten and make difficult choices on what to cut back on,” Long said. “This is why consumption appears to be slowing. Americans are getting squeezed financially.”