Consumer inflation slows to lowest rate in 3 years

(CNN) — Inflation continues to loosen its grip on American consumers, with price hikes slowing by the most in three and a half years.

The Consumer Price Index, a measurement of price changes for a commonly purchased basket of goods and services, briskly retreated from a 2.9% rate in July to 2.5% in August, the lowest since February 2021 and a rate that matches the average seen in 2018, according to Bureau of Labor Statistics data released Wednesday.

On a monthly basis, prices rose 0.2%, unchanged from July.

Economists were expecting the annual rate would slow significantly last month to 2.6% annually, according to FactSet. That’s in part due to favorable year-ago comparisons: Last summer’s gas price spike jolted inflation higher in August 2023.

This story is developing and will be updated.