CPI inflation remained high in September

Inflation remained stubbornly high in September, maintaining continued pressure on the purchasing power of household budgets.

The Consumer Price Index rose 3% year over year in September, compared with a 2.9% annual increase in August, the Bureau of Labor Statistics said Friday. This was the highest inflation rate in 12 months since January.

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

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

Inflation generally declined after that, and nearly reached the Fed’s target of a 2% annual rate by early 2025. But the annual inflation rate has been rising every month since April, driven at least in part by President Donald Trump’s import taxes, which traders have largely passed on to consumers. Economists said a 0.7% month-on-month rise in clothing prices – which are largely imported from abroad – in September showed the impact of tariffs on prices.

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

Gasoline prices, which rose 4.1% in September compared to August on a seasonally adjusted basis, were the biggest factor driving the overall inflation rate higher.

There was some good news for core household earnings: Landlord-equivalent rent, a measure of housing costs, rose just 0.1% during the month, the smallest monthly increase since 2021. Low housing costs helped keep overall inflation under control because these costs account for a large proportion of typical household budgets as well as the Consumer Price Index.

“Inflation may 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. “Details are positive, with shelter and transportation services declining. Some key parts of the basket are declining even if tariffs push up goods such as clothing.”

Updated October 24, 2025: This article has been updated to include additional information from the CPI report.