Prices are rising faster again. The consumer price index showed annual inflation of 3.7% in September, after rising 0.6% for the month, the Bureau of Labor Statistics reported. That’s up from 3.4% in August, and one-tenth of a percentage point above expectations. CNBCusinflationcalculator
What drove it: gas
Gasoline prices soared 9.1%, accounting for about half the gain in headline CPI. The energy index rose 5.2% in September. CNBCustravel
What about “core” inflation?
Core CPI, which strips out food and energy, rose 0.3% for the month and 2.6% over the past year, compared with 2.4% in August. One analyst warned it’s more than just fuel. Carson Group’s Sonu Varghese said core inflation ran at a 3.7% annualized pace in September. CNBCkiplinger
Travel costs
Airline ticket prices rose 1.2% in September and were 22.4% higher than a year earlier. That helps explain why holiday flights are so expensive. ustravel
The long view
Inflation as measured by the CPI has surpassed the Fed’s 2% benchmark since March 2021. The Fed will announce its next policy decision on Wednesday, October 28. The next CPI report, for October, comes out on November 10. Consumer prices rose 3.7% annually in September as gas prices skyrocket +2
How it relates to the Social Security COLA
Readers will naturally compare 3.7% with the new Social Security raise. Here is the careful version:
- Social Security benefits are indexed to the CPI-W, a different version of the index than the headline CPI-U that’s usually quoted. Wikipedia
- The 3.6% COLA is based on the average over the third quarter, not just September.
So the two numbers aren’t directly comparable. What’s fair to say is that prices are rising at about the same pace as the 2027 raise, so the raise may mostly keep pace. Check our COLA article for the full details.
What it means for your budget (general tips, not from the reports)
- Gas and travel are where the pressure is most visible.
- If you’re on a fixed income, update your monthly budget before January.
- Watch for the November 10 report.
Bottom line
September’s price jump was largely about gasoline, but other measures also edged up. Inflation is running above the Fed’s target, and the next report arrives November 10.
