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STORY: U.S. consumer prices rose by the most in more than a year in August, marking the second straight month of accelerating inflation.

But the annual rise in underlying inflation was the smallest in nearly two years.

That's according to a report on Wednesday from the U.S. Labor Department, which said prices rose six tenths of one percent last month as the cost of a gallon of gasoline peaked at nearly four dollars a gallon up from close to $3.70 a month earlier.

The increase was the largest since June 2022 but met the expectations of economists polled by Reuters.

In the 12-months through August, prices jumped 3.7% after climbing 3.2% in July. Still, year-on-year consumer prices have come down from a peak of 9.1% in June 2022.

So-called core inflation which takes out prices of food and energy rose 0.3% in August and 4.3% over the past year. That was the smallest year-over-year gain since September of 2021.

The figures remain well above the Federal Reserve’s 2% inflation target, though the central bank isn’t expected to raise interest rates again at its meeting next week.

Since March 2022, the Fed has raised its benchmark overnight interest rate by 5 and one-quarter percentage points.

But a rate hike in November remains on the table as services inflation remains elevated.