Inflation rose two-tenths of a percentage point to 2.9% for the year ending in August in the consumer price index, the Bureau of Labor Statistics reported Thursday, raising fears that about price pressures from tariffs.

Forecasters had expected that inflation would come in at that level, so the headline number isn’t much of a surprise.

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Core inflation, a measure that strips out volatile food and energy prices, held steady at a 3.1% annual rate.

The decline in the headline rate of inflation suggests that price pressures are still increasing as President Donald Trump carries out a trade war with his historic tariffs. Economists generally expect that the tariffs will have the effect of raising prices. 

In the month of August alone, prices rose 0.4%.

The latest CPI report is the last such inflation report that the Federal Reserve will receive before it meets next week to decide whether to cut interest rates. Trump has been pushing the Fed to cut rates for months, and most investors expect that to be the outcome next Wednesday.

The Fed also has the latest producer price index to consider. The PPI report was released on Wednesday and showed that inflation unexpectedly fell seven-tenths of a percentage point to 2.6% for the year ending in August.

The Fed’s goal is 2% annual inflation. Even though inflation has not yet met that target, markets generally expect that the Fed will need to loosen monetary policy because of recent indications that the labor market is slowing.

The economy added just 22,000 jobs in August, and the unemployment rate rose to 4.3%, the Bureau of Labor Statistics reported last week. Also, the July jobs report revealed that some 258,000 fewer jobs were added in May and June than previously reported. 

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Additionally, on Tuesday the BLS announced that labor market growth for the 12 months ending in March was 911,000 jobs less than previously reported.

Still, it is worth noting that, despite the downward job revisions, economic output has been up. U.S. GDP expanded at a 3.3% annual rate in the second quarter, the Bureau of Economic Analysis reported in its most recent projection.