US Inflation on September 12, 2026: Still Above Target, With a Divided Outlook

Published September 12, 2026

As of September 12, 2026, the latest official US inflation data covers August. The Bureau of Labor Statistics released that report on September 11, because the September CPI report is not scheduled until October 14.¹

The headline number

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% in August on a seasonally adjusted basis. Prices were 3.4% higher than a year earlier (not seasonally adjusted), unchanged from July.¹

Core CPI, which excludes food and energy, rose 0.3% during the month and 2.4% over the previous year.¹ Core inflation is a useful measure of underlying pressure, but it does not describe the full cost of living faced by households. People still pay for food, fuel, electricity, and transportation.²

Energy was especially important in August. Gasoline prices rose 3.9% during the month, and the gasoline index accounted for more than one-third of the overall monthly CPI increase. Airfares also rose sharply, while shelter and food inflation continued to add to household costs.¹

In plain language: inflation has slowed substantially from its pandemic-era peak, but it re-accelerated during 2026 (CBS notes it hit a three-year high in May)³, and CPI inflation remains above 2%. The Federal Reserve’s formal 2% target applies to PCE inflation, a different measure.² A lower inflation rate does not mean prices have gone back down. It means that prices are increasing more slowly than before.

Why the outlook is uncertain

The August data presents two competing signals.

First, the monthly core CPI reading rose from 0.2% in July to 0.3% in August.¹ Producer prices also rose 0.4% in August, with the annual PPI rate accelerating to 5.4%.⁴ Those readings suggest that the disinflation process may be uneven and that businesses may still be facing meaningful cost pressure.

Second, some of the recent acceleration is concentrated in energy and other volatile categories.¹ Federal Reserve Governor Christopher Waller said on September 3 that recent data offered some signs of disinflation, although inflation remained above the Fed’s goal. He spoke before the August CPI release and made his policy outlook conditional: continued improvement could support holding rates, while a reversal could warrant an increase.⁵ If energy prices stabilize and housing and wage pressures remain contained, headline inflation could still cool again.

The main risk is that higher energy costs become embedded in expectations and spread into other goods and services. The University of Michigan’s preliminary September survey found that consumers’ one-year inflation expectations rose to 4.6%, up from 4.0% in August and the highest since June.⁶ Expectations are not the same thing as realized inflation, but a sustained rise can make the path back to 2% more difficult.

What analysts are projecting

Analysts and markets are not fully aligned about the Federal Reserve’s next move:

• CBS reported September hike odds near 90%; EY-Parthenon forecast a quarter-point increase to 3.75%–4.00%.⁷
• A Reuters poll conducted September 4-9, before the CPI release, found that a majority of economists expected the Fed to hold rates at its September meeting and through the rest of 2026. The same poll put annual PCE inflation at 3.5% in 2026 and 2.4% in 2027, with inflation unlikely to return to the Fed’s 2% target before 2028.⁸
• The Philadelphia Fed’s Third Quarter Survey of Professional Forecasters, released August 14 (before the August CPI report), projected fourth-quarter-over-fourth-quarter 2026 headline CPI inflation of 3.6% and core CPI inflation of 2.8%.⁹
• Goldman Sachs Asset Management, in its September 8 Market Pulse (published before the CPI report), expects core PCE inflation to approach 2% in 2027 as temporary pressures from tariffs, AI supply shortages, energy, and portfolio management fees fade.¹⁰

These forecasts differ in timing, inflation measures, and assumptions, so they are not directly interchangeable. A rate hike next week would respond to current inflation risk; it would not by itself determine whether inflation returns to 2% in 2027. Conversely, a forecast for cooling inflation next year does not rule out a near-term policy response to an energy shock.

What to watch next

The next important data points are:

1. The Federal Reserve meeting on September 15-16, including its updated economic projections and guidance.¹¹
2. The PCE price index release on September 30. PCE is the Federal Reserve’s preferred inflation measure.¹²²
3. September employment and wage data, which will help policymakers weigh inflation against labor-market conditions.
4. The September CPI release on October 14, which will show whether the August energy increase was temporary or persistent.¹

Our interpretation of the evidence is cautious: inflation is likely to remain above target in the near term, while the medium-term path depends heavily on energy prices and whether core inflation continues to moderate. Households should plan around uncertainty rather than assume that either rapid rate cuts or permanently high inflation is guaranteed.

For people with limited financial flexibility, even 3.4% inflation can be consequential. Rent, food, transportation, and borrowing costs do not affect every household equally, and averages can hide severe pressure in essential categories. Understanding the data is useful, but access to financial education and practical tools matters just as much.

This post is for educational purposes only and is not investment, tax, or financial advice.

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