The key Commerce Department report released Wednesday shows consumer prices in August increased 0.3% from the previous month, less than Wall Street expected. 

The report, the personal consumption expenditures price index, is the primary inflation gauge for the Federal Reserve, which sets interest rates based on inflation.  

Excluding food and energy, the PCE price index increased 0.2%.

The seasonally adjusted 0.3% increase for the month, puts the 12-month gain at 3.4%. Economists surveyed by Dow Jones had been looking for increases of 0.3% and 3.7% respectively, according to CBNC.com.