U.S. inflation rose to 3.7% in September 2026, up from 3.4% in August, as a surge in gasoline prices pushed up the cost of living. The Bureau of Labor Statistics said on Wednesday, October 14, that consumer prices rose 0.6% from August and 3.7% from a year earlier, above the 3.6% economists expected.
Core inflation, which leaves out food and energy, also rose more than forecast, to 2.6%.
September 2026 CPI at a glance
| Measure | September | Forecast | August |
|---|---|---|---|
| Headline CPI, year over year | 3.7% | 3.6% | 3.4% |
| Headline CPI, month over month | 0.6% | 0.6% | 0.4% |
| Core CPI, year over year | 2.6% | 2.5% | 2.4% |
| Core CPI, month over month | 0.33% | 0.2% | 0.3% |
| Real average weekly earnings, month over month | −0.5% | — | +0.2% |
Figures from the BLS release as reported by investingLive and ForexFundamentals.
What pushed prices up?
Energy, above all. Gasoline prices jumped 9.1% in a single month and energy rose 5.2%, as crude oil climbed amid the Iran war. The national average for gasoline hit records for the time of year in September, according to AAA. See our gas prices explainer.
But energy wasn't the only driver. Axios reported that price pressures are spreading from energy into services:
| Category | September change | August change |
|---|---|---|
| Gasoline | +9.1% | +3.9% |
| Energy | +5.2% | +2.1% |
| Hotels and lodging away from home | +2.0% | +2.4% |
| Airfares | +1.2% | +2.7% |
| Used cars | +0.7% | +0.4% |
| Owners' equivalent rent | +0.3% | +0.2% |
| Apparel | +0.3% | 0.0% |
| New vehicles | +0.2% | +0.3% |
| Rent | +0.2% | +0.2% |
| Food | 0.0% | +0.1% |
Month-over-month changes.
The one piece of relief: food prices were flat.
Are paychecks keeping up?
No. Real average weekly earnings, which measure pay after inflation, fell 0.5% in September. Prices rose faster than typical paychecks for the month.
What does it mean for interest rates?
The report raised the odds that the Federal Reserve raises rates again. The Fed already lifted its benchmark rate to 3.75%–4% in September, its first hike since 2023.
According to CME FedWatch, as reported by Axios, the chance of an October hike jumped from 22% to about 50% after the report. It fell back to 28% by Thursday afternoon, after several Fed officials signaled they were in no rush. Two-year Treasury yields jumped about 13.5 basis points right after the release.
The Fed meets on October 27–28. Our Fed meeting guide explains what officials have said.
What does it mean for you?
- Social Security: The same inflation data produced a 3.6% raise for 2027. See how much your check will rise.
- Borrowing: Mortgage rates are near 7.4%, the highest since late 2023, and could stay high if the Fed keeps hiking.
- Savings: Higher rates mean better yields on savings accounts and CDs, though many still trail 3.7% inflation.
What to watch
The October CPI report, due in mid-November, will show whether the spike in gas prices is fading. AAA's national average has eased in October, but oil climbed back toward $100 a barrel late last week.
Published Monday, October 19, 2026. This article is for information only and is not financial advice.
