Inflation accelerated in August, according to data released Thursday by the Labor Department, complicating the Federal Reserve's efforts to balance interest rates amid intense political and economic pressure.

The consumer price index (CPI) rose 0.4 percent last month, up from a monthly gain of 0.2 percent in July, and 2.9 percent over the past 12 months. The numbers were in line with the expectations of economists.

The new inflation data comes less than a week before the Fed's monetary policy committee is set to meet in Washington, D.C.

The Fed is expected to cut interest rates for the first time this year after a steep slowdown in the job market. But rising inflation could boost the risks of stagflation, where prices rise and the economy weaken at the same time.

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