Inflation rose in August and remained well above the Federal Reserve's target rate as central bank policymakers weigh potential interest rate cuts at their meeting next week.

The Bureau of Labor Statistics on Thursday said that the consumer price index (CPI) – a broad measure of how much everyday goods like gasoline, groceries and rent cost – rose 0.4% in August compared with last month, while it rose to 2.9% on a year-over-year basis. The monthly figure was hotter than the estimate of economists polled by LSEG.

So-called core prices, which exclude volatile measurements of gasoline and food to better assess price growth trends, were up 0.3% from the prior month and 3.1% from a year ago. Both figures were in line with economists' expectations.

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