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August inflation held at 3.4% after a revision erased July's 3.7%

The Bureau of Economic Analysis put August inflation at 3.4% on Wednesday, September 30, the same rate it now shows for July, and the S&P 500 fund closed down 0.2%.

· 2 min read · ETF.net Research

Fresh vegetables sit on a stainless steel grocery store checkout counter.

Key takeaways

  • July's 3.7% is the figure a revision just erased.
  • Inside the month, prices sped up instead of cooling.
  • Spending rose even as inflation-adjusted income stayed unchanged.
  • Long Treasurys fell for a seventh session in a row.

August inflation did not fall. The Bureau of Economic Analysis said prices of what households buy, the measure the Federal Reserve watches, were up 3.4% from a year earlier.

The July report, published on August 26, had put that rate at 3.7%, and the rate excluding food and energy at 3.3%. Against those figures, August looked like a drop.

It was not. Wednesday's release revised past figures back to January 2021. July is now 3.4% as well, and excluding food and energy the rate is 3.0% in both months.

On Tuesday, New York Fed President John Williams was still using 3.7%.

"At 3.7 percent, inflation is unquestionably too high," he said in Buffalo. That 3.7% was the same measure.

The pace inside the month did not slow either. Prices rose 0.3% in August after 0.1% in July.

Households were not cutting back. Adjusted for inflation, spending rose 0.6%, while after-tax income, adjusted the same way, was unchanged.

SPY, the fund that holds the S&P 500, was up 0.7% at the day's high and closed down 0.2%. That was its third down session in a row. RSP, which holds those same companies in equal amounts, fell 0.7%, so the typical company fell more than SPY.

XLK, which holds the technology companies in the S&P 500, rose 0.6%. It was the only one of the 11 big U.S. sector funds to close higher.

Technology was the only sector fund higher

Day return, 11 Select Sector SPDRs, Wednesday, September 30, 2026

  • Technology+0.6%
  • Energy−0.06%
  • Consumer Discretionary−0.3%
  • Communications−0.4%
  • Utilities−0.7%
  • Materials−0.8%
  • Real Estate−1.1%
  • Financials−1.2%
  • Industrials−1.3%
  • Health Care−1.4%
  • Consumer Staples−1.5%

Staples fell 1.5%, the most of the 11.

CME FedWatch, which reads interest-rate futures, put the chance of a quarter-point rise in October at 35%, down from 51% a day earlier.

TLT, the fund that holds U.S. Treasurys maturing in more than 20 years, closed at $77.78, down 0.6%. It touched its lowest price in 52 weeks. The decline was the seventh in a row, back to Tuesday, September 22. Over five sessions the price is down 3.3%.

TLT posted a seventh straight decline

TLT daily close, September 21–30, 2026

TLT. Trend: down. 8 points from $82 to $78, range $78 to $82. Use the arrow keys to read each point.
2026-09-212026-09-30

Wednesday's close was the weakest of the streak.

The 3.4% figure was a drop only against July's old 3.7%. That 3.7% is gone.

Frequently asked

Did August inflation fall from July?

No, August was 3.4%, and Wednesday's revision now shows July at 3.4% as well.

What price measure is the 3.4%?

It is the Bureau of Economic Analysis measure of prices households buy, the one the Federal Reserve watches.

Did prices slow during August itself?

No, prices rose 0.3% in August after 0.1% in July.

What did rate futures do after the release?

CME FedWatch put the chance of a quarter-point rise in October at 35%, down from 51% a day earlier.

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