US inflation rises to 3.7% in September as gasoline jumps 9.1%
US consumer prices rose 3.7% in the year to September 2026, above the 3.6% expected, driven by energy. Core inflation reached 2.6%. What it means for the Fed's October meeting.
US consumer price inflation rose to 3.7% in the year to September 2026, from 3.4% in each of the two previous months, according to data published on 14 October. Economists surveyed by FactSet had expected 3.6%.
Energy did most of the work. Gasoline prices rose 9.1% in September alone and are 34.2% higher than a year earlier, while the energy index as a whole is up 20.4% on the year.
Core inflation, which excludes food and energy, also beat expectations: it rose to 2.6% a year from 2.4% in August, against a consensus of 2.5%.
"The CPI was clearly hot, and there aren't many ways to sugarcoat it," said Adam Crisafulli of Vital Knowledge, quoted by CBS News. Capital Economics said markets now saw roughly a 50% chance of another Fed increase in October, up from 20% before the data.
The Federal Reserve, which raised rates in September for the first time since 2023, meets again on 27 and 28 October. This was the last consumer price report before the US midterm elections.
Why it matters: inflation erodes the real value of savings and fixed income, and it is the main reason central banks raise rates. Energy prices travel through futures markets first, which is why oil and gasoline moves are often the earliest signal of a change in inflation.