What September’s Inflation Report Says About Rising Prices

What did the September inflation report find?

The Consumer Price Index, or CPI, tracks price changes over time for a basket of commonly purchased goods and services. The September report showed prices rising 3.7% over the year, compared with 3.4% in August. That was higher than the 3.6% annual increase economists expected, according to FactSet. ²

The annual rate describes how the index changed compared with a year earlier. It does not mean every item became 3.7% more expensive, or that each household’s spending rose by that amount. People buy different things, and prices for particular goods and services can move differently. ²

What is driving prices higher?

Energy costs led the monthly rise. Gasoline prices jumped 9.1% from August and made up more than half of the monthly increase in the overall CPI. Energy prices were 20.4% higher than a year earlier, while gasoline prices were up 34.2%. ²

The report says energy prices had risen sharply since the start of the year amid higher oil costs linked to the war in Iran and Russia’s war with Ukraine. That account identifies major pressures described in the source; the available reporting does not quantify how much each conflict contributed. ²

Prices also rose faster in the measure that leaves out energy and food. Core CPI increased 2.6% over the year, compared with 2.4% in August and a 2.5% forecast. This suggests price increases were not confined to energy, though the supplied figures do not detail every category’s contribution. ²

How could this affect household costs?

For households that drive, a rise in gasoline prices can mean paying more at the pump. The report does not say how much an individual will spend, since that depends on factors such as driving habits and where they live.

Inflation also affects purchasing power: when prices rise overall, the same amount of money buys fewer goods and services. ³ A national inflation figure is a broad measure, not a personal budget calculation, so people may feel the change differently depending on what they regularly buy.

The national average gasoline price was reported at $4.33 per gallon on Wednesday, up from $2.98 before the wars began, according to the report. It also said pump prices had cooled slightly in recent weeks but remained elevated. These are national figures and may not match local prices. ²

What does core inflation tell us?

Core CPI removes food and energy, categories that can move sharply. It can help show whether price increases are also present beyond those more changeable costs. In September, core CPI rose 2.6% over the year, above August’s 2.4% rate. ²

Core inflation is not a measure of every cost a household faces, and it does not mean food or energy prices are unimportant. In this report, energy was the strongest stated source of the monthly increase, while the core measure also moved higher. ²

What is still uncertain about the outlook?

The September report shows what happened to measured prices during that period; it does not establish what prices will do next. The supplied sources do not provide a forecast for future inflation or explain whether energy costs will keep rising.

The PBS report describes the latest figures as putting pressure on people dealing with everyday costs and says economist Heather Long discussed what they mean for Americans. The available source summary does not include her detailed remarks, so it cannot support a fuller account of her specific assessment. ¹

For the official figures, readers can consult the U.S. Labor Department’s CPI release. The CBS report summarizes the September data and its major contributors. ²