September CPI report shows inflation accelerated to 3.7% as energy costs soared
Inflation accelerated across the U.S. in September, rising at an annual rate of 3.7% as energy costs jumped, according to new government data.
The latest Consumer Price Index shows that stubborn price pressures persist just weeks before Americans vote in the midterm elections.
By the numbers
The CPI tracks changes in prices over time for a basket of commonly purchased goods and services. Economists expected the index to rise at an annual rate of 3.6% in September, according to FactSet.
Inflation picked up after two months of holding steady at an annual pace of 3.4%. 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%.
Inflation has risen sharply since the start of the year due to soaring energy prices, sparked by the war in Iran and Russia's war with Ukraine.
The Labor Department said Wednesday that gasoline prices, which rose 9.1% in September from the prior month, 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%.
Prices at the pump have cooled slightly in recent weeks but remain elevated. 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.
Higher diesel prices increase the cost of transporting goods around the U.S., often leading to higher prices for consumers on everyday items like groceries.
"The CPI was clearly hot, and there aren't many ways to sugarcoat it," Wall Street analyst Adam Crisafulli, head of Vital Knowledge, said in a note to investors on Wednesday.
Energy played a "huge role," he added, noting that prices may not head lower anytime soon as the wars in the Middle East and Ukraine escalate.
"Energy prices being so high for so long is starting to seep into the broader economy," he said.
Nine in 10 Americans say prices are the most important factor shaping their views of the economy, according to a CBS News poll released earlier this month.
