American consumers felt fresh pressure in August as inflation accelerated across some of the biggest categories of household spending, eroding paychecks and testing budgets already stretched by higher borrowing costs.
The Labor Department said the Consumer Price Index (CPI) rose 2.9% over the past year and 0.4% from July, signaling renewed price momentum after a summer of mixed readings. Food, gasoline and shelter once again drove much of the increase, illustrating how stubbornly high prices continue to weigh on families despite slower overall economic growth.
Below is a closer look at what the latest CPI numbers reveal about where prices are rising fastest—and what that means for your household budget.
After a brief reprieve earlier this year, grocery prices turned up again, rising 0.5% in August and 3.2% compared with the same month in 2024. Some everyday staples saw especially sharp moves. Coffee, a morning necessity for millions of households, jumped 3.6% from July and is now 20.9% higher than a year ago.
Meat costs remain elevated. Ground beef prices are up 12.8% year over year and steak prices have surged 16.6%. The Bureau of Labor Statistics reports a pound of ground chuck now averages $6.34. Chicken, fish and seafood posted smaller increases of under 3% annually, while ham and pork chop prices fell.
Eggs, which became a symbol of inflation anxiety last year, showed no monthly price increase but remain 10.9% higher than in August 2024. A dozen large Grade A eggs averaged $3.59 in August—down from $3.60 in July and $3.78 in June but still well above pre-pandemic levels.
BlackRock’s chief investment and portfolio strategist for the Americas, Gargi Chaudhuri, noted that many of these food products have been affected by U.S. tariffs on imported goods. “As the U.S. is a net food importer, those higher trade barriers are feeding into consumer prices,” she said.
Dining out also became more expensive, with restaurant meals up 0.3% on the month and 3.9% higher than a year ago.
Economists and consumers are paying close attention to whether President Trump’s wide-ranging tariffs are showing up in the numbers. Core inflation—which strips out volatile food and energy—rose 3.1% year over year in August, unchanged from July. On a monthly basis, core prices increased 0.3%, matching July’s pace and marking the fastest monthly gain in six months.
Import-heavy categories, such as new and used cars, home furnishings, apparel and canned foods, saw some of the most pronounced price pressures. “After subdued gains in June and July, August saw firmer price momentum from tariffs on some goods as companies passed on higher costs to the consumer,” Chaudhuri added.
Shelter costs, though easing from pandemic-era spikes, remain a major burden. Housing inflation rose 0.4% in August and is up 3.6% from a year earlier. Some regions—particularly outside the Northeast—are seeing home prices cool and markets tilt toward buyers, but affordability remains strained nationwide for renters and owners alike.
Transportation costs also swung higher. Used car prices climbed 1% in August and are now 6% higher than a year ago, while new car prices increased 0.3% on the month and 0.7% annually. Gasoline prices, which had been declining, jumped 1.9% from July; even so, gas remains 6.6% cheaper than a year earlier. As of September 11, the national average price for a gallon of regular gasoline was $3.19, according to AAA, compared with $3.25 a year ago.
Airfares, which had softened earlier this summer, surged 5.9% in August following a 4.0% increase in July, reflecting strong travel demand and higher fuel costs.
With inflation still above the Federal Reserve’s 2% target, August’s CPI report underscores the delicate balancing act facing policymakers ahead of their meeting next week. Inflation has picked up just as the labor market shows signs of softening, complicating the central bank’s decision-making.
Markets are overwhelmingly betting on a 25-basis-point rate cut to support employment, but economists say the combination of firmer price growth and weaker job data muddies the outlook for further policy moves. “Even though a 25-basis-point cut next week seems all but certain, the combination of firmer inflation and weaker labor market data complicates the Fed’s picture going forward,” said Jake Krimmel, senior economist at Realtor.com.
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