Consumer inflation in the U.S. annually rose 2.5% in August, marking the slowest annual increase since February 2021, according to data released Wednesday.
The consumer price index (CPI), which measures changes in the prices of goods and services from a consumer's perspective, came in line with market estimates, and showed a significant slowdown from a year-on-year increase of 2.9% recorded in July.
The figure is also a sharp decline from the 9.1% annual gain recorded in July 2022, which was the highest since November 1981.
On a monthly basis, CPI showed an increase of 0.2%, and came in line with market expectations, following also a 0.2% gain in July.
"The index for shelter rose 0.5 percent in August and was the main factor in the all items increase," the Labor Department's Bureau of Labor Statistics said in a statement.
"The food index increased 0.1 percent in August, after rising 0.2 percent in July," it added. "The energy index fell 0.8 percent over the month, after being unchanged the preceding month."
Core CPI, which excludes volatile food and energy prices, gained just 0.3% in August from the previous month, coming in higher than market estimates of 0.2%, but slightly gaining pace from the 0.2% increase in July.
Annually, core CPI climbed 3.2% in August, coming in line with expectations, and following a 3.2% year-on-year gain recorded in July.
The shelter index annually showed a gain of 5.2% in August, accounting for over 70% of the annual increase in core CPI, according to the U.S. agency.
"The index for owners' equivalent rent rose 0.5 percent over the month and the index for rent increased 0.4 percent," said the bureau. "The lodging away from home index rose 1.8 percent in August, after rising 0.2 percent in July."
The energy index, on the other hand, decreased 0.8%, after being unchanged in July.
While the gasoline index declined 0.6% on a monthly basis, it plummeted 10.3% year-on-year.
The electricity index, meanwhile, fell 0.7% last month, and the index for natural gas decreased 1.9%.
The medical care index declined 0.1%, after falling 0.2% in July.
