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US Macro · Macro Primer · Standard · 5 ppFree

US consumer price inflation

One month, three inflation rates: headline 3.40%, core 2.45%, energy 16.28%

2 min preview · 2026-09-25

What the price implies
3.40% headline · 2.45% core · 16.28% energy

Executive summary

United States consumer prices rose 3.40% in the twelve months to August 2026, core prices 2.45%, and energy 16.28%: three published answers to the question "what is inflation", separated only by which components are counted. This report decomposes the twelve-month figure, restates the month on the seasonally adjusted measures, and puts the Federal Reserve's own yardstick beside them.

The twelve-month path is where the two measures diverge. Headline was 2.39% in January 2026, 4.25% by May, and 3.40% in August, on energy's swing from 2.85% in September 2025 to 23.54% in May 2026. Energy's contribution went from -0.01pp in January to 1.73pp in May, 94% of the headline's own 1.86pp move over those four months. Core moved from 2.50% to 2.85% to 2.45% over the same period, a range of under half a point. A reader following headline alone saw inflation surge and ease; a reader following core saw almost nothing happen.

Policy moved on 16 September 2026. The FOMC raised the federal funds target range by a quarter point to 3.75% to 4.00% that day, by a unanimous vote, stating that inflation remains elevated; its stated goal is 2% on the PCE measure, which ran 3.3% on the core index in July 2026.

Key points
  • All items rose 3.40% in the twelve months to August 2026; all items less food and energy rose 2.45%.
  • Energy rose 16.28% over twelve months, having reached 23.54% in May 2026, and at 7.3% of the basket it contributes 1.20pp.
  • The seasonally adjusted month ran 0.4% in August after 0.1% in July, over a third of it gasoline (3.9% in the month); core ran 0.3%, and the three-month annualised core rate is 2.0% against its twelve-month 2.45%.
  • Core inflation is lower than the 3.11% of August 2025 even though headline is higher than that month's 2.92%; core PCE, the measure the 2% objective refers to, ran 3.3% in July 2026, and the FOMC raised its target range by a quarter point on 16 September 2026.
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In the full report
  • Macroeconomic environment
  • What drove 3.40%: contributions by component
  • The month itself, seasonally adjusted
  • The series, charted
  • Shelter: a third of the basket, split
  • The Federal Reserve's yardstick, and its answer