The Labor Department said that the 12-month inflation rate, which gauges the rate at which prices grow, was 3.7% in August, up from 3.2% in July.

The findings highlight the difficulties that officials have in attempting to stabilize prices, which rose at the quickest rate in decades last year.

Inflation has declined dramatically since its peak last year.

However, economists believe the US central bank, which wants to keep inflation at 2%, will remain concerned that the problem has not been rectified.

In an effort to curb price increases, the bank has already hiked its benchmark interest rate to the highest level in 22 years, aiming a range of 5.25% to 5.5%.

It is scheduled to convene later this month to discuss whether additional hikes are required.

Chart of US Inflation
According to the study released on Wednesday, fuel costs were the primary cause of the increase in consumer prices from July to August. Inflation reached 0.6% in June, the highest since June 2022.

Even after excluding food and gasoline, where price swings are prevalent, prices rose by 0.3%, which was more than predicted.

Housing expenses, which are a big component of the US consumer price index and were expected to begin cooling this year, climbed for the 40th month in a row.

According to analysts, the Federal Reserve is still unlikely to raise interest rates at its meeting, especially since rate increases have minimal impact on fuel prices, which were the largest contributor to the August inflation increase.

However, the statistics released on Wednesday may prompt it to act later in the year, according to Charles Hepworth, investment director at GAM Investments, a Zurich-based asset management firm.