August’s core inflation posted the lowest monthly year-to-year growth in nearly five and a half years, the monthly Consumer Price Index (CPI) report released Friday by the U.S. Bureau of Labor Statistics (BLS) shows.
Core inflation, which excludes volatile energy and food prices, increased 2.4% from its August 2025 level and less than July’s 2.5% 12-month increase, the new BLS report reveals.
The last time annual core inflation was this low was in March of 2021, former President Joe Biden’s second full month in office, when it was 1.6%. The next month, it jumped to 3.0%, ending a 12-month streak under 2.0%. It has not fallen below 2.0% - the Federal Reserve’s target rate – in any month since.
The Consumer Price Index (CPI) rose nearly three times faster under Biden than it did during Trump's first term. From January 2021 to January 2025, consumer prices increased 21.5%. In contrast, from January 2017 to January 2021, the CPI rose 7.8%.
Annual inflation averaged 1.9% under Trump (Feb. 2017-Jan. 2021), compared to 5.0% under Biden (Feb. 2021-Jan. 2025).
Compared to July, seasonally-adjusted core inflation rose 0.3% in August, following a 0.2% monthly rise in July, Friday's report shows.
The CPI for all items increased 0.4% on a seasonally-adjusted monthly basis, after rising 0.1% in July. The index for gasoline rose 3.9% from July, accounting for more than a third of the monthly all-items increase. The index for all energy 2.1% over the month.
The shelter index rose 0.3% in August after rising 0.1% in July. The index for food increased 0.1% percent over the month, as the index for food away from home rose 0.3%.
On an annual basis, the all-items CPI rose 3.4%, matching July’s 12-month growth rate. The energy index increased 16.3% for the 12 months ending August, while food prices rose 2.7%. In contrast, used car and truck prices fell 2.3% and the index for medical care commodities dropped 2.3%.
