Here’s the inflation breakdown for August 2026
Inflation remained stubbornly high in August, largely on the back of higher energy prices amid the Iran war, economists said.
TL;DR
- August's annual inflation rate was 3.4%, unchanged from July.
- The Iran war is a major factor, disrupting oil supplies and driving up gasoline, diesel, and jet fuel prices.
- Gasoline prices rose nearly 4% in August, and diesel prices hit a record high of $6 per gallon.
- AI development is increasing demand and scarcity of computer chips, leading to higher prices for electronics.
- Lingering effects of tariffs are also contributing to increased consumer goods prices.
- Higher borrowing costs for consumers are expected as U.S. Treasury bond yields reach multi-year highs.
- There is a likelihood the Federal Reserve will raise interest rates at its next policy meeting to combat inflation.
- Economists are uncertain about the trajectory of inflation, with risks skewed towards further increases.