The U.S. Bureau of Labor Statistics released its inflation report
for August on September 11^th.

August Inflation Summary:

The BLS reported Annual Inflation for August was unchanged from July’s 3.4%. But when calculated to 2 digits, we get a slight increase from 3.36% to 3.40%.

• The CPI Index fell from a peak of 335.123 in May to 333.918 in July then rose to 334.980 in August.
• Monthly Inflation for August 2026 was 0.32% up slightly from August 2025’s 0.29%.
• Next release: October 14^th, 2026
• BTC ROC Generates a BUY Signal
• We’ve updated Inflation Adjusted Gasoline Prices and Historical Crude Oil Prices

The all items index rose 3.4 percent for the 12 months ending August as it did for the 12 months ending July. The all items less food and energy index rose 2.4 percent over the year, following a 2.5-percent increase over the 12 months ending July. The energy index increased 16.3 percent for the 12 months ending August. The food index increased 2.7 percent over the last year.

Oil prices remain the major factor in the current inflation situation. This is a totally different type of inflation than one induced by FED money printing.

The closure of the Strait of Hormuz represents a supply-side shock, fundamentally different in nature from monetary inflation. When the Fed expands the money supply, inflation is driven by too many dollars chasing the same goods; it’s a broad, diffuse phenomenon that erodes purchasing power across the economy and is more systemic. The Hormuz closure, by contrast, physically removes a critical input from the global economy, spiking energy costs that cascade through the economy but can be short-lived if the supply is restored quickly. Raising interest rates in response to this kind of inflation is counterproductive, since it strangles the demand side of an economy already being strangled on the supply side. This risks creating stagflation, i.e., the toxic combination of rising prices and a stagnant economy.

Looking at Table A below, we can see that on an ANNUAL basis energy commodities like gasoline are the major inflationary force. There were actually quite a few other sectors that were low or even negative on a monthly basis.

The Federal Reserve is holding the federal funds rate at 3.50%–3.75% as inflation remains above its 2% objective. With the next FOMC meeting scheduled for September 15–16, markets are watching incoming inflation, employment, and energy-price data for signals on the Fed’s next move.

For more see: FED Monetary Policy and Inflation.

As you can see from our MIP projection from last month, August inflation was just slightly above our “Likely High”. 

A major limitation of the MIP chart is that it can only make projections based on historical averages and can’t predict things like Wars and Hurricanes and related economic changes.

Go here to view our current MIP projection.

Typically, when we talk about inflation, we are talking about the change in prices (price inflation) on a yearly or annual basis, i.e., how much prices have changed since last year. Generally, this is because the monthly changes are small and tend to fluctuate in both directions, but usually add up to measurable inflation on an annual basis.

The monthly inflation rate for June 2026 was negative, i.e., disinflationary -0.35%, July was virtually zero, i.e., -0.01%. and August monthly inflation rebounded to 0.32% but that was only slightly higher than August 2025’s monthly inflation of  0.29%, so annual inflation only rose slightly.

See: Monthly Inflation Rate for more information and a complete table of Unadjusted Monthly Rates.

This month, inflation is sharply, and unemployment is also down slightly, so the misery index fell from 7.73% to 7.46%. It is considerably below the June 2022 peak, when the index was at 12.66%.

Read More on the Misery Index…