September inflation accelerated to 3.7% as energy prices surged.
Why it matters: The report adds uncertainty to the Federal Reserve's policy path and keeps pressure on household budgets. Core inflation also accelerated, showing price increases extended beyond fuel.
- Consumer prices rose 3.7% in September from a year earlier, up from 3.4% in August.
- Gasoline prices rose 9.1% from August to September and drove more than half of the monthly CPI increase.
- Core CPI rose 2.6% year over year, up from 2.4% in August.
- The Fed's next scheduled policy meeting is October 27-28, 2026.
U.S. consumer prices rose 0.6% in September from August, the largest monthly increase in five months, according to the Bureau of Labor Statistics. Annual inflation accelerated to 3.7%, up from 3.4% in August.
Gasoline was the biggest driver, according to the BLS. Prices rose 9.1% from August to September and 34.2% from a year earlier, accounting for more than half of the monthly all-items increase. The broader energy index rose 5.2% in September and 20.4% over the year.
Price pressure also extended beyond fuel, the BLS reported. Core CPI, which excludes food and energy, rose 0.3% in September and 2.6% over the year, up from 2.4% in August. Shelter prices increased 0.4%, while prices also rose in recreation, used vehicles, education, airline fares, medical care and apparel. Food prices were unchanged during the month.
“The report was worse than expected. Price increases were widespread,” Bill Adams, chief U.S. economist at Fifth Third Bank, said, according to The Associated Press.
The report adds uncertainty to the Fed's policy path. The central bank raised its federal funds target range by 25 basis points at its September meeting, to 3.75%-4.00%, according to its statement.
By the numbers
- 3.7% - annual consumer-price increase in September
- 9.1% - gasoline-price increase from August to September
- 2.6% - annual core-CPI increase in September
Yes, but: Gasoline and broader energy prices accounted for much of the monthly increase, while food prices were unchanged.
What's next: The Fed's next scheduled policy meeting is October 27-28, 2026.