New CPI report shows 0.6% rise in overall inflation in September
Inflation rose at an annual rate of 3.7% as energy costs, primarily gasoline prices, spiked. Consumers also faced price increases in other categories, such as services, food, shelter, clothing and transportation costs. Costs jumped 0.6% from August’s 3.4%, the biggest gain in five months.
Inflation picked up after two months of holding steady at an annual pace of 3.4% (August), according to the Bureau of Labor Statistics. Core CPI, which excludes the more volatile energy and gas categories, rose 2.6% from a year ago, accelerating from a 2.4% rate in August and higher than economists’ forecast of 2.5%.
Gasoline prices soared 9.1% in September from the prior month, and accounted for more than half the monthly increase in the CPI report. Energy prices rose 20.4% from a year ago, while gasoline jumped 34.2%. The national average for a gallon of gasoline was $4.33 a gallon on Wednesday, AAA reported, up from $2.98 before the war started. The national average for diesel, which hit a record high in late September, was $6.29 a gallon.
In addition to oil and gas, major investments in data centers and AI have put upward pressure on prices for computer chips and associated electronics.
Key Numbers from the September 2026 CPI Report issued by the U.S. Bureau of Labor Statistics
- Headline CPI (Monthly): Up 0.6% (the largest monthly increase in five months).
- Headline CPI (Year-over-Year): Up 3.7%.
- Core CPI (Monthly, excluding food and energy): Up 0.33% (or ~0.3%).
- Core CPI (Year-over-Year): Up 2.6%.
- Energy Costs: Up 20.4% from a year ago, driven heavily by a 34.2% jump in gasoline prices.
- Food Costs: Up 2.5% over the last 12 months.
Market and Economic Reax
Bond yields rose sharply following the report, with the 10-year Treasury yield climbing past 5.2% and stock futures slipping. The report also revived expectations that the Federal Reserve will raise interest rates again. According to the CME FedWatch Tool, the odds of an October 27–28 rate hike were at 34.9% by 3PM, and 65.1% for no change.
