U.S. consumer prices rose 3.7% in September, and gasoline accounted for more than half of the monthly increase
The U.S. Bureau of Labor Statistics (BLS) said on the 14th (local time) that the Consumer Price Index (CPI-U) for September rose 3.7% from a year earlier and 0.6% from the previous month on a seasonally adjusted basis. The year-on-year increase was 0.3 percentage points larger than the 3.4% in August. https://x.com/BLS_gov/status/2110347871652642924
Gasoline pushed it up
The BLS said the gasoline index rose 9.1% from the previous month in September, accounting for more than half of the overall monthly increase. The energy index rose 5.2% month on month and 20.4% year on year, and gasoline rose 34.2% year on year. https://x.com/BLS_gov/status/2111117464113467637
The food index was unchanged from the previous month, with food at home down 0.1% and food away from home up 0.2%. The year-on-year food inflation rate is 2.5%. The beef index fell 1.0% month on month and the milk index 2.0%. Core CPI, excluding food and energy, rose 0.3% month on month and 2.6% year on year, a larger increase than the 2.4% in August. Shelter rose 0.4% month on month and 3.2% year on year, and airline fares rose 22.4% year on year. Rising prices mean that the same consumption costs U.S. households more money, not that prices have fallen.
In the details, the communication index fell 0.2% month on month, in contrast with a 2.3% rise in August, while used cars rose 0.7%, education 0.6%, and airline fares 1.2% month on month. The medical care services index rose 0.1%. The BLS advises using seasonally adjusted month-on-month figures to judge short-term trends. The year-on-year 3.7% and the month-on-month 0.6% are numbers with different comparison periods.
Wages, producer prices and employment are separate figures
According to the BLS real earnings release (USDL-26-1575), real average hourly earnings for all employees fell 0.5% from the previous month in September. This was the result of nominal earnings rising 0.1% while CPI-U rose 0.6%. https://x.com/BLS_gov/status/2110348038308782565
According to the producer price release (USDL-26-1576), the final demand producer price index rose 1.3% month on month on a seasonally adjusted basis in September, with goods up 2.6% and services up 0.8%. The BLS did not say how much or when producer prices will pass through to consumer prices. https://x.com/BLS_gov/status/2110709902028964065
Employment is a separate survey. According to the BLS Employment Situation release, nonfarm payrolls rose by 29,000 in September and the unemployment rate was little changed at 4.2%. Job counts come from the establishment survey and the unemployment rate from the household survey, two different figures.
CPI and PCE are different indicators
The indicator the Federal Reserve (the Fed) uses as the benchmark for measuring its 2% target is the Personal Consumption Expenditures (PCE) price index from the Commerce Department's Bureau of Economic Analysis (BEA). September PCE has not yet been released and, according to the BEA schedule, will come out on October 29 at 8:30 a.m. (U.S. Eastern Time), or 9:30 p.m. the same day Korea time. The CPI's 3.7% is not the PCE price figure the Fed uses for its target.
The Fed statement: what changed from July
On September 16, the Fed raised the target range for the federal funds rate by 0.25 percentage points to 3.75-4.00%, and the vote was 12 to 0. At the previous meeting on July 29, it held the range at 3.50-3.75% by a vote of 9 to 3, with the 3 dissenters preferring a hike.
The wording also changed. The July statement said inflation "remains elevated relative to the 2% target" and partly reflects supply shocks including energy. The September statement said briefly that "inflation remains elevated" and stated that this hike "will support a more timely return to the 2% target." The employment sentence, "job gains have kept pace with labor force growth and the unemployment rate has been little changed," was the same in both statements. The description of activity changed from July's mention of the Middle East conflict to geopolitical developments and solid domestic spending in September.
The Fed's official account announced Chair Warsh's participation in a conversation at the Annual Meetings of the International Monetary Fund and the World Bank.
The next FOMC decision will come after the October 27-28 meeting, at 3 a.m. Korea time on October 29.
The final demand producer price index rose 6.3% year on year. The PPI measures prices received by producers and the CPI measures prices paid by consumers, and the BLS explains that the scope and weights of the two indicators differ.
Looking at the monthly path together
According to Table A of the U.S. Bureau of Labor Statistics (BLS), the seasonally adjusted month-on-month change in CPI-U was 0.9% in March 2026, 0.6% in April, 0.5% in May, a 0.4% decline in June, 0.1% in July, 0.4% in August and 0.6% in September. The year-on-year rate was presented as 2.4% in January, 2.4% in February, 3.3% in March, 3.8% in April, 4.2% in May, 3.5% in June, 3.4% in July, 3.4% in August and 3.7% in September, the BLS said. The month-on-month rise in core CPI, excluding food and energy, was 0.2% in July, 0.3% in August and 0.3% in September, the BLS said. The month-on-month energy trend changed direction, from a 5.7% decline in June and a 1.5% decline in July to a 2.1% rise in August and a 5.2% rise in September, the BLS said. Gasoline likewise went from a 9.7% decline in June and a 2.9% decline in July to a 3.9% rise in August and a 9.1% rise in September, the BLS said. Looking at September alone, energy pushed up the total, and the path included a rebound after the summer declines.