The consumer price index (CPI) advanced 0.2 percentage points in August, sliding to a 2.5 percent annual increase from a 2.9 percent increase in July. The drop came in below expectations as prices cooled further than anticipated.

Inflation eased to new three-year lows, teeing up the Fed to begin gradually reducing interest rates at a meeting next week.

Inflation declined in August to the lowest level since 2021, as prices rose 2.5% from last year. The data boosts the Federal Reserve's case for an interest rate cut next week.

US inflation fell to 2.5 per cent in August, setting the stage for the Federal Reserve to start cutting interest rates at its meeting next week. The latest annual consumer price index compared with July’s 2.