US Inflation Rises to 3.7 Percent in September as Gasoline Prices Jump 9.1 Percent

US consumer prices rose 3.7 percent in the year to September, the Bureau of Labor Statistics reported on Wednesday, up from 3.4 percent in August.

The monthly gain was 0.6 percent, seasonally adjusted. Core prices, which exclude food and energy, rose 0.3 percent for the month and 2.6 percent over the year, up from 2.4 percent in August. Economists surveyed by FactSet had expected a 3.6 percent annual headline rate and a 2.5 percent core rate.

Energy accounted for most of the acceleration. The energy index jumped 5.2 percent in September. Gasoline prices rose 9.1 percent for the month and are up 34.2 percent over the year. The Bureau of Labor Statistics said gasoline alone accounted for more than half the monthly increase in the overall index. Energy prices overall are 20.4 percent higher than a year earlier.

The war that began in late February has kept crude oil elevated. AAA data showed the national average pump price at $4.33 a gallon on Wednesday, up 45 percent from $2.98 on 27 February, the day before the conflict started. Food prices were unchanged for the month. Shelter rose 0.4 percent.

The September report is the last major inflation release before the November midterm elections. Higher prices for gasoline, clothing, and air fares have remained a political issue for the White House. Core services continued to show firmness, with shelter costs accelerating slightly from the prior month.

Mark Zandi, chief economist at Moody’s, said the report showed inflation remains uncomfortably strong and that the war’s effects are visible across the numbers. The three-month annualised core rate has moved higher. Non-housing services have run above 3 percent year-on-year for several months.

The Federal Reserve has held rates steady in recent meetings while watching the energy-driven pickup. The September data strengthen the case for caution on further easing. Markets had priced a softer print; the 0.6 percent monthly gain matched the consensus but the core surprise was on the high side.

Households face the same arithmetic. The average retired worker will see a 3.6 percent Social Security cost-of-living adjustment in 2027, announced the same day, but that adjustment is based on the CPI-W through the third quarter. The September jump in energy will feed into next year’s calculation only in part. For now the concrete figures are the ones released on Wednesday: 3.7 percent headline, 2.6 percent core, 9.1 percent monthly gasoline, and energy up more than 20 percent over the year.