Consumer prices remained elevated in August as the Iran war's energy shock fueled a fresh burst of inflation.Why it matters: The renewed price pressures are squeezing household budgets, with signs that underlying inflation is proving stubborn across the broader economy.The data could strengthen the case for the Federal Reserve to raise interest rates next week.By the numbers: The Consumer Price Index rose 0.4% in August from the previous month, after rising 0.1% in July, according to the Labor Department.Prices were up 3.4% from a year earlier, holding steady from July.Excluding volatile food and energy costs, the so-called core gauge climbed 0.3% during the month and 2.4% from a year earlier. That compares with increases of 0.2% and 2.5%, respectively, in July.Between the lines: The inflation data carries unusual weight ahead of the Fed meeting next week, when policymakers will be weighing the first interest rate hike in nearly three years.Fed governor Christopher Waller said last week that his decision would be "heavily influenced" by August inflation, noting that he would consider a rate hike if inflation came in hot.Some CPI components feed directly into the Fed's preferred inflation gauge, the Personal Consumption Expenditures Price Index.Zoom in: Energy drove much of the headline acceleration, but the underlying inflation picture was broader.Gasoline prices jumped 3.9% in August, accounting for more than a third of the overall monthly increase, the Bureau of Labor Statistics said. Energy prices rose 2.1%.But higher energy was not the entire story. Core inflation also accelerated, with shelter costs gaining 0.3% after a 0.1% increase in July. Airline fares rose 2.7%, while new and used vehicle prices also increased.There was some price relief last month, with medical care prices falling 0.2% and motor vehicle insurance dropping 0.8%. Grocery prices were unchanged. The intrigue: The inflation outlook looks bleak from here, with energy prices so far shooting higher in September as the Iran war escalates.Oil prices are hovering around $100 a barrel, up from about $80 in mid-August.The average price of diesel hit a record $6 per gallon, AAA said on Friday. What to watch: With less than two months before the midterm elections, renewed inflation pressures could complicate the Trump administration's effort to convince voters that affordability is improving.The bottom line: The latest energy shock means that the economy — and policymakers — may have more inflation pressure to contend with in the months ahead.Editor's note: This story has been updated with additional details.