CPI Inflation Stayed High In September

Inflation stayed stubbornly high in September, keeping the squeeze on the buying power of household budgets.

The Consumer Price Index rose 3% over the year in September, up from a 2.9% annual increase in August, the Bureau of Labor Statistics said Friday. That was the highest 12-month inflation rate since January.

“Core” inflation, which excludes volatile prices for food and energy, also rose 3.0% over the year, down from 3.1% in August. Both measures were below the 3.1% expected by forecasters according to a survey of economists by Dow Jones Newswires and The Wall Street Journal.

The report highlighted the staying power of the inflation surge that started as the economy reopened from pandemic shutdowns in 2021. Inflation peaked at 40-year highs in 2022 and began to recede after that, as the Federal Reserve raised interest rates to discourage borrowing.

Inflation generally fell after that, and had nearly reached the Fed’s goal of a 2% annual rate by early 2025. But the yearly inflation rate has risen every month since April, pushed up at least partly by President Donald Trump’s import taxes, which merchants have largely passed along to consumers. The 0.7% month-over-month rise of prices for apparel—which is largely imported from overseas—in September showed the impact of tariffs on prices, economists said.

The CPI report was the only data published by the Bureau of Labor Statistics during the ongoing government shutdown, which began Oct. 1 and has no end in sight. The BLS brought back staff to produce the CPI report because it is crucial for determining the annual cost-of-living adjustments to Social Security benefits. The data for the September report were collected through surveys conducted in September, prior to the shutdown, the BLS stated.

Gasoline prices, which rose 4.1% in September from August on a seasonally-adjusted basis, were the biggest factor pushing up the overall inflation rate.

A bit of good news for household bottom lines was that “owner’s equivalent rent,” a measure of housing costs, only rose 0.1% over the month, the smallest monthly increase since 2021. The subdued housing costs helped keep overall inflation in check because those costs are a large percentage of typical household budgets as well as the CPI.

“Inflation might not be slowing, but it’s not surprising to the upside anymore,” David Russell, global head of market strategy at TradeStation, wrote in a commentary. “The details are positive, with shelter and transportation services moderating. Some key parts of the basket are cooling even if tariffs nudge items like apparel higher.”

Update, Oct. 24, 2025: This article was updated to include additional information from the CPI report.