U.S. inflation jumps 2.9% in August as gas, grocery, airfare prices rise

U.S. inflation moved higher last month as the price of gas, groceries, hotel rooms and airfare rose, along with the cost of clothes and used cars.

Consumer prices rose 2.9 per cent in August from a year earlier, the Labor Department said Tuesday, up from 2.7 per cent the previous month. It marked the biggest increase since January.

Excluding the volatile food and energy categories, core prices rose 3.1 per cent, the same as in July. Both figures are above the Federal Reserve's two per cent target.

The reading is the last data the Fed will receive before its key meeting next week, when policymakers are widely expected to cut their short-term rate to about 4.1 per cent from 4.3 per cent.

Still, the figures underscore the challenges the Fed is facing as it experiences relentless pressure