US consumer prices show modest increase falling short of expectations in September
The latest report on U.S. consumer prices indicates a modest increase in September, falling short of economists’ expectations. The Consumer Price Index (CPI) rose by 0.3% last month, following a 0.4% increase in August. Over the past year, the CPI has increased by 3.0%, slightly up from 2.9% in August.
Key Economic Indicators
Forecasts from economists surveyed by Reuters anticipated a 0.4% rise for the CPI and a year-on-year increase of 3.1%. Excluding food and energy prices, the core CPI gained 0.2% in September after advancing 0.3% the previous month.
Impact of Government Shutdown
The release of the CPI data occurred despite a government shutdown that has limited the availability of economic data. This report is crucial as it assists the Social Security Administration in adjusting benefits for millions of recipients in 2026. Initially, the CPI report was expected on October 15.
- Core CPI year-on-year increase: 3.0%
- Previous month core CPI rise: 3.1%
- Consumer price increase in September: 0.3%
- Consumer price increase in August: 0.4%
Economists point out that businesses have been gradually passing on import tariffs, affecting hiring and consumer prices. It is estimated that consumers have absorbed around 20% of these duties. Meanwhile, companies have depleted their inventories due to rising costs and are now facing heightened prices while restocking.
Federal Reserve Interest Rate Outlook
The Federal Reserve remains on track to adjust its interest rates in response to these economic indicators. A reduction of 25 basis points is anticipated, bringing the rates to a range of 3.75%-4.00%.
Concerns are emerging regarding the integrity of October’s CPI report. The ongoing government shutdown means that significant portions of consumer price data are unavailable, raising questions about the accuracy and completeness of future economic evaluations.
The Bureau of Labor Statistics (BLS) is already facing challenges due to resource constraints and budget cuts, which have led to disruptions in data collection for several areas. The 2013 government shutdown saw about 75% of the CPI data collected, indicating potential difficulties for the current report.
As the situation evolves, analysts will closely monitor the effects of these economic changes leading into the end of the year.
