According to the Consumer Price Index, inflation increased 0.2% for the month of August and the annual inflation rate declined to 2.5%, its lowest level since February 2021. NBC News’ Brian Cheung breaks down the latest inflation numbers that are showing signs of improvement.

Since last year, the Federal Reserve has held interest rates at their highest level in more than two decades. High borrowing costs for everything from mortgages to credit card loans have helped slow the economy and lower inflation, but the policy risks tipping the U.S. into a recession.