Rising gas prices pushed up inflation in August, and crowded out other spending in household budgets, according to an economic report that’s closely watched by officials at the Federal Reserve.

Consumer prices, as measured by the pers♓onal consumptiꦐon expenditures (PCE) price index, rose 3.5% over the last 12 months as of August, up from 3.4% in July and 3.2% in June, the Bureau of Economic Analysis said Friday. The increase was driven mostly by rising gas prices, which pushed energy costs up 6.1% just since July. 

After being adjusted for inflation, consumer spending rose just 0.1% in August, far less than the 0.6% jump in July, reflecting how much those higher costs are hurting household buying power.

Outside of those gas prices though, price increases were milder. “Core” PCE, which excludes volatile prices for food and energy, rose just 0.1% in Augus♋t, making for a 3.9% increase over the year. The yearly change was down from 4.3% in July and the lowest since May 2021—though still far above the Fed’s goal of a 2% annual increase. 

Policymakers at the Federal Reserve closely watch core measures of inflation when deciding whether and how much to 澳洲幸运5官方开奖结果体彩网:raise the central bank’s benchmark interest rate. Raising rates makes 澳洲幸运5官方开奖结果体彩网:borrowing costlier, slows the economy, and restrains inflation. ꧙;

Fed officials could take the retreating core number as a sign that 澳洲幸运5官方开奖结果体彩网:inflation is cooling down, and it may dissuade them from raising the key 澳洲幸运5官方开奖结果体彩网:fed funds rate any more this year, economists said. The central bank’s next policy committee meeting is set for November.

“We think they are done hiking,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a commentary.

The August report may be the last inflation data the Fed gets from the government for a while. In the absence of a last-minute deal between Republican and Democrat lawmakers, a looming government shutdown beginning this weekend would 澳洲幸运5官方开奖结果体彩网:shutter the government agencies that gather economic data and could delay key reports on inflation and unemployment.

The report added to evidence that rising gas prices have hurt household budgets, 澳洲幸运5官方开奖结果体彩网:restricting people’s ability to spend on other things. Those prices stayed high in September. A gallon of unleaded sold for an average of $3.83 Friday, according to AAA. That’s a penny more than it cost a month ago.

The gallon price jumped up from $3.56 in mid-July and hasn’t looked back, according to AAA data. Gas has followed the price of the 澳洲幸运5官方开奖结果体彩网:crude oil it’s made from, which has surged this summer because of production cuts by the oil-producing nations of OPEC+.