US consumer inflation accelerated more than expected in September, climbing to an annual rate of 3.7% as surging gasoline prices tightened their grip on household budgets in the final major price report before the midterm elections.
Data released by the Bureau of Labor Statistics on Wednesday showed consumer prices rose 0.6% in September from the previous month, lifting the 12-month inflation rate from 3.4% in August. Economists had expected a 3.6% annual reading.
Energy leads the surge
Fuel was the dominant force behind the increase. The overall energy index jumped 5.2% on the month, with gasoline prices surging about 9% — accounting for more than half of the month's total increase, according to the bureau. On a 12-month basis, gasoline is up sharply, reflecting crude oil prices firmly above $90 a barrel amid the ongoing war between the US, Israel and Iran, which has disrupted a vital shipping route for oil and gas.
The pressure was not confined to the pump. Car repairs, doctor visits, plane tickets and clothing all contributed to a broader-than-expected pickup in prices, underscoring that inflationary forces have spread beyond energy.
Core inflation also runs hot
A closely watched measure of underlying inflation also overshot forecasts. Core CPI, which excludes volatile food and energy prices, rose 0.3% from August and 2.6% from a year earlier, above the 2.5% annual pace economists had expected. Shelter costs rose 0.4% on the month, while food prices were largely flat.
The report keeps the economy squarely in the political spotlight ahead of the November midterms. With annual price growth now running ahead of typical wage gains of around 3%, many households are watching their real incomes shrink — a dynamic that economists say is deepening affordability concerns and could weigh heavily on voters' judgment of the administration's economic record.
Markets reacted immediately, with stocks slipping in midday trading and the yield on the 10-year Treasury rising as investors weighed the possibility of further interest-rate action later this month.
Sources:
- CNN: Inflation rose to 3.7% last month in last snapshot of consumer prices before the midterms
- Morningstar: September CPI Report Shows Inflation at a 3.7% Annual Rate
Data released by the Bureau of Labor Statistics on Wednesday showed consumer prices rose 0.6% in September from the previous month, lifting the 12-month inflation rate from 3.4% in August. Economists had expected a 3.6% annual reading.
Energy leads the surge
Fuel was the dominant force behind the increase. The overall energy index jumped 5.2% on the month, with gasoline prices surging about 9% — accounting for more than half of the month's total increase, according to the bureau. On a 12-month basis, gasoline is up sharply, reflecting crude oil prices firmly above $90 a barrel amid the ongoing war between the US, Israel and Iran, which has disrupted a vital shipping route for oil and gas.
The pressure was not confined to the pump. Car repairs, doctor visits, plane tickets and clothing all contributed to a broader-than-expected pickup in prices, underscoring that inflationary forces have spread beyond energy.
Core inflation also runs hot
A closely watched measure of underlying inflation also overshot forecasts. Core CPI, which excludes volatile food and energy prices, rose 0.3% from August and 2.6% from a year earlier, above the 2.5% annual pace economists had expected. Shelter costs rose 0.4% on the month, while food prices were largely flat.
The report keeps the economy squarely in the political spotlight ahead of the November midterms. With annual price growth now running ahead of typical wage gains of around 3%, many households are watching their real incomes shrink — a dynamic that economists say is deepening affordability concerns and could weigh heavily on voters' judgment of the administration's economic record.
Markets reacted immediately, with stocks slipping in midday trading and the yield on the 10-year Treasury rising as investors weighed the possibility of further interest-rate action later this month.
Sources:
- CNN: Inflation rose to 3.7% last month in last snapshot of consumer prices before the midterms
- Morningstar: September CPI Report Shows Inflation at a 3.7% Annual Rate
