US inflation is back in the spotlight. Here’s a plain-English explanation of what’s happening and what it means for you.

What is happening? The PCE price index — the Federal Reserve’s preferred inflation gauge — hit 3.4% in August, well above the Fed’s 2% target. The core index, which strips out food and energy, stood at 2.9%.

Why is it rising? Energy is the main driver: gasoline and oil prices have surged on the back of the US-Iran war, with Brent crude near $99 a barrel. Consumer confidence has dived to a near 12-and-a-half-year low as households worry about fuel costs.

What’s the connection to growth? The economy is growing — GDP was revised up to 2.2% for the second quarter — and employers added 90,000 jobs in September. That resilience gives the Fed room to keep rates higher for longer.

What about your money? Higher inflation erodes spending power and keeps borrowing costs up, even as a strong jobs market supports wages.

What next? Economists say inflation could cool if energy prices settle — but while the Iran conflict keeps oil elevated, price pressure is unlikely to fade quickly.