U.S. inflation hits 3.7% as gasoline jumps 9.1% in September

U.S. consumer prices rose 3.7 per cent in September from a year earlier, up from 3.4 per cent in August, as a 9.1 per cent monthly jump in gasoline pushed up the cost of living, the U.S. Bureau of Labor Statistics said Oct. 14.

The Consumer Price Index report showed prices rose 0.6 per cent from August on a seasonally adjusted basis, up from 0.4 per cent in August. The annual rate was 3.4 per cent in August and economists had expected 3.6 per cent in September, Yahoo Finance reported. The reading lands 20 days before the U.S. midterm elections on Nov. 3.

Gasoline was the main driver. The bureau said the gasoline index rose 9.1 per cent in September and accounted for more than half of the monthly increase, according to Kiplinger. Gasoline is up 34.2 per cent from a year ago, and the broader energy index rose 5.2 per cent in the month and 20.4 per cent over 12 months, the bureau’s tables show. Yahoo Finance, citing AAA data, said the average pump price reached a record $4.33 in September, nearly $0.50 above the previous monthly record set in 2023.

Core prices, which exclude food and energy, rose 0.3 per cent in the month and 2.6 per cent from a year earlier, up from 2.4 per cent in August. Economists had expected a 0.2 per cent monthly gain and a 2.5 per cent annual rate, according to Kiplinger. Shelter rose 0.4 per cent in the month and 3.2 per cent over 12 months. Airline fares rose 1.2 per cent in the month and are up 22.4 per cent from a year ago. Food prices were unchanged in the month and are up 2.5 per cent over 12 months. Fuel oil, used for home heating mainly in the Northeast, rose 15.3 per cent from August, Yahoo Finance reported.

The numbers matter for interest rates. The Federal Reserve raised its policy rate in mid-September for the first time in three years, saying the move would “support a timelier return to the Committee’s 2 percent goal,” according to Kiplinger. The Fed’s next policy meeting is scheduled for Oct. 27 and 28, with the decision due Oct. 28. Yahoo Finance reported that traders priced close to even odds of a second hike at that meeting after the report, up from under 25 per cent before it.

Economists were split on whether the report is enough to move the Fed. “This makes the October meeting live,” Stephanie Roth, chief economist at Wolfe Research, told Yahoo Finance. Brad Conger of Hirtle & Co. said the data “bolsters the case for a hike at the October FOMC,” according to Kiplinger. Jeff Schulze of the Franklin Templeton Institute said the print was likely not enough for back-to-back hikes, citing recent dovish remarks from Fed officials. Seema Shah, chief global strategist at Principal Asset Management, told Yahoo Finance that the data “reinforces the view that inflation remains too persistent for the Fed to declare victory.” Tim Urbanowicz of Innovator ETFs said $100-plus crude was adding “friction to already sticky core prices,” Kiplinger reported.

Canadians face a similar squeeze. Statistics Canada’s consumer price index rose 3.0 per cent in August, with gasoline 22.8 per cent higher than a year earlier, Money.ca reported, as we covered earlier. The Bank of Canada, which has held its key rate at 2.25 per cent at seven straight decisions this year, announces its next decision on the same day as the Fed, Oct. 28, after Canada lost 68,000 jobs in September. The Bank of Canada is weighing energy-driven inflation against a weakening job market.

U.S. voters are already worried about prices. A Pew Research Center survey released Oct. 8 found that 74 per cent of Americans are very concerned about gasoline and energy prices, up from 60 per cent in July.

Energy costs are expected to stay elevated while the situation in the Middle East remains unresolved, Kiplinger said. Its David Payne expects annual U.S. inflation to end the year at 4 per cent, a forecast that is his own and not a bureau figure.

What happens next: the Fed announces its decision Oct. 28, and its following meeting is Dec. 8 and 9.

Via Yahoo Finance and Kiplinger. Figures are from the U.S. Bureau of Labor Statistics release of Oct. 14, 2026.

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