US inflation quickened to 3.7% in September, driven mainly by higher gasoline and energy costs linked to the Iran war. Core inflation also rose, adding pressure on the Federal Reserve and household budgets.
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01Summary
- 01The consumer price index rose 3.7% in September from a year earlier, up from 3.4% in August, the Bureau of Labor Statistics said on Wednesday.
- 02Core CPI, which excludes food and energy, climbed to 2.6% in September from 2.4% in August.
- 03Gasoline prices rose 9.1% in September and are up 34% over the past year, while average nationwide pump prices hit $4.33 a gallon, according to AAA.
- 04Average diesel prices were $6.30 a gallon on Wednesday, up about 68% from $3.76 before the Iran war began on 27 February.
- 05The Social Security Administration announced a 3.6% cost-of-living adjustment for 2027, while an AARP survey found 76% of respondents said a 3.5% COLA would not be enough.
02Why it matters
Higher inflation can squeeze household budgets, push up borrowing costs and shape the Federal Reserve's rate decisions. It also affects benefits, travel costs and the price of goods moved by fuel-dependent transport.
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