The numbers
US consumer prices rose 3.7 percent in September from a year earlier, the Labor Department said on Wednesday, up from 3.4 percent in August and above the 3.6 percent economists had expected. Prices climbed 0.6 percent from August to September, the biggest monthly gain in five months.
Core prices, which strip out food and energy, rose 2.6 percent over the year and 0.3 percent over the month, also faster than forecast. The monthly core pace, if it lasted a year, would run well above the Federal Reserve's 2 percent target.
Energy is doing the damage
Energy costs drove much of the increase. Brent crude touched $110 a barrel this week for the first time since May as attacks on shipping in the Strait of Hormuz and strikes on Saudi and Russian energy sites tighten supply. Diesel has risen even faster than crude, and freight and war-risk insurance costs are climbing with it.
That matters for households because fuel feeds into almost everything: deliveries, farming, air travel and the cost of goods on shelves. Grocery inflation has cooled from its 2022 peak, but gasoline, electricity and insurance bills have not.
Weeks before the midterms
The report is the last full consumer inflation snapshot before Americans vote in the midterm elections. Voters consistently rank prices among their top concerns, and the numbers give Democrats and Republicans a fresh set of figures to argue over in the final stretch of the campaign.
For the Fed, the picture is awkward. Faster price growth argues for keeping policy tight, while a slowing job market argues for cutting. Officials have said they want more evidence before moving, and the next inflation reading is not due until after the election.
Some relief may be coming from the base effects of last year's energy spike, but analysts warn that a prolonged Hormuz disruption would keep fuel prices high into winter. For now, the trend is the wrong direction for an incumbent administration heading into a vote.