More expensive gas, semiconductors likely pushed up inflation last month

Inflation likely worsened in September in one of the last price reports the government will issue before the midterm elections that have been heavily defined by concerns over affordability

WASHINGTON -- Inflation likely worsened in September in one of the last price reports the government will issue before the midterm elections that have been heavily defined by concerns over affordability.

On a monthly basis, prices are expected to have risen 0.6% from August to September, FactSet said, up from 0.4% the previous month and the biggest jump since April.

Ongoing inflation has taken a toll on Trump’s standing with U.S. voters. A poll by The Associated Press-NORC Center for Public Affairs Research found that just 17% of U.S. adults approve of his handling of the cost of living issue. And only 26% approve of his handling of the economy overall, a new low.

Excluding the volatile food and energy categories, core prices likely rose 2.5% in September from a year ago, up slightly from 2.4% in August. That is closer to the Fed's 2% inflation target, but it has been stuck at mostly that level since January of this year — just before the Iran war. Core prices are forecast to have risen just 0.2% from August to September.

Fed Chairman Kevin Warsh said last month that inflation isn't moving quickly enough back to the central bank's target, causing the Fed to hike rates for the first time in three years, to about 3.9%.

Atlanta school worker dies after falling from Six Flags roller coaster in Georgia

Yet some key Fed officials have suggested the central bank can wait before increasing rates again. The Fed has a policy meeting Oct. 27-28 but most Wall Street investors expect it to hold rates then, and potentially implement another hike in December. Fed officials have penciled in just one more rate hike this year.

By raising borrowing costs, the Fed hopes to slow spending and growth and cool price increases. Yet much of the current inflation comes from supply shocks, such as the Iran war's disruption to oil and gas supplies, and higher interest rates can't address those bottlenecks.

Prices at the pump have ticked lower in recent weeks, though they remain higher than a month ago. Gas prices averaged $4.34 a gallon nationwide Tuesday, up a few cents from a month earlier.

The artificial intelligence buildout has also sharply elevated the cost of semiconductors, computer equipment, and electrical components, which have been passed into costs for consumer electronics such as gaming devices, laptops, and smartphones.

On September 1, Nintendo increased the price for its Switch 2 gaming system by 11% to $499.99. And Apple's newest iPhone, the iPhone 17, cost about 10% more than its previous upgrade, though some of that likely reflects greater capabilities.