Prices rose 5.3 percent in August compared with a year ago, as inflation showed early signs of easing amid the ongoing coronavirus pandemic.

Data released Tuesday by the Bureau of Labor Statistics showed that prices rose 0.3 percent in August compared with July.

The August data breaks an eight-month streak of rising or steady inflation — and is a welcome sign for policymakers at the Fed and the White House, who argue that inflation will start to cool down as the economy heals. Their expectation is that as supply chains catch up with consumer demand, prices will land closer to the Fed’s 2 percent annual target for inflation.

But there’s still plenty of uncertainty about whether the shift will stick.

For starters, there’s no guarantee that inflation will continue to tick down. Policymakers within the Biden administration and the Fed say they need months of data to understand how the pandemic is affecting inflation, and for how long. Plus, prices for specific categories — such as meat, rent or used cars — won’t necessarily follow the same patterns.

On Tuesday, the Council of Economic Advisers tweeted that the slight slowdown in August was “encouraging.” But the CEA added a note of caution: “continued economic disruptions from the pandemic may continue to impact inflation in months to come in either direction.”

Senior administration officials point to the month-to-month figures as their preferred snapshot of inflation, because that data can surface immediate trends and improvements to supply chains that have been backlogged for months. There were some encouraging hints that prices in hard-hit sectors were cooling down compared to earlier this summer.

For example, over the past year, prices for used cars and trucks have taken up a huge share of inflation, in large part due to chip shortages. Overall, prices for the vehicles are up nearly 32 percent compared with last year. But from July to August, prices for used cars and trucks fell 1.5 percent.

Similarly, prices for hotels and motels fell 3.3 percent from July to August. Airline fares fell 9.1 percent over the same period. Even rent, which some economists feared would keep rising as home values soared, rose only 0.3 percent over the previous month.

The data is likely to bolster Democrats’ arguments that more government spending won’t push inflation even higher. Republicans have chastised the White House and congressional Democrats for trying to pass another sprawling legislative package, saying it will heat up the economy even more. Conservatives also say the Federal Reserve should step in now to combat inflation by raising interest rates and yanking back support for the markets.

But part of Biden’s pitch is that his spending plans target rising prices in the long term. White House officials say that investing in stronger child-care options for families and physical infrastructure repairs, everyday costs for working-class families will come down.

The August inflation report wasn’t enough to soothe Wall Street by Tuesday’s close. The markets jumped shortly after the data released. But they gave up those gains by late afternoon, with the Dow Jones industrial average dropping 300 points.

Many left-leaning economists and government officials say inflation is “transitory,” meaning it doesn’t reflect persistent, widespread price increases that pulse through the whole economy. But that message could be increasingly hard to grasp for millions of households facing steep price tags for groceries, used cars or gas right now.

Plus, economists are closely monitoring people’s perceptions of inflation. If Americans expect the cost of goods and services to stay high, they may be more likely to buy furniture or plane tickets before the cost stings even worse. That cycle of behavior only pushes prices higher, making inflation expectations self-fulfilling.

A survey released Monday by the Federal Reserve Bank of New York showed that Americans’ inflation expectations are at record highs. One year from now, people expect inflation will be at 5.2 percent, according to the August Survey of Consumer Expectations. The month before, that survey measure was 4.9 percent.

Joe Brusuelas, chief economist at RSM, said the latest inflation figures were a “real victory for team transitory.” He added that the cost of shelter — namely rental prices that didn’t escalate — also offered a dose of relief for Fed officials, even as the broader housing industry is still being shaped by the pandemic economy.

“If we are going to observe a broadening of inflation that puts at risk Fed policy and price stability, it’s going to be via the housing market, and that’s just not happening right now,” Brusuelas said.

In the backdrop, the Fed is figuring out when to start pulling back on its support for the markets, namely $120 billion a month in bond purchases. That decision depends on when Fed leaders think “substantial further progress” has been made on both inflation and the job market, which is still down more than 5 million jobs compared with before the pandemic.

A growing number of Fed officials, including Chair Jerome H. Powell, think that bar has been met on inflation. Meanwhile, the economy added only 235,000 jobs in August, raising concerns that the labor market is losing its summertime momentum.

Economists and Fed watchers are eager for any updates on when the Fed will start to “taper” its asset purchases. Next week, Fed policymakers will convene for their September meeting and release a new crop of economic projections on inflation, the unemployment rate and more.

Cleveland Fed President Loretta Mester told reporters Friday that she expects that inflation will fall closer to the Fed’s 2 percent annual target next year as supply chains clear up and businesses find creative ways to get their products. But much depends on the delta variant, vaccinations and how the recovery continues to take shape, she said.

“Will [inflation] move back down to 2 percent? That’s what I have penciled in for next year,” Mester said. “But I may be changing that when I sit down with the data next week and look really hard what the data are.”

Andrew Van Dam contributed to this report.