The so-called core consumer price index — which excludes food and energy costs — increased 0.3% from July and 3.2% from a year ago, Bureau of Labor Statistics figures showed Wednesday. 

Economists see the core gauge as a better indicator of underlying inflation than the overall CPI. That measure climbed 0.2% from the prior month and 2.5% from a year ago in August, marking the fifth straight month the annual measure has eased and dragged down by cheaper gasoline prices.

The BLS said shelter was "the main factor" in the overall advance.

While Wednesday's reading won't deter the Fed from cutting interest rates next week, it reduces the chance of an outsize reduction. Even so, policymakers have made it clear that they're highly focused on softness in the labor market, which is more likely to drive policy discussions and decisions in the months ahead. They'll also have more data to consider leading up to their November and December meetings.

Traders trimmed the probability that the Fed cuts rates by a half point next week to near zero. Treasury yields rose, S&P 500 futures edged lower and the dollar pared its losses on the day.