Inflation breakdown for September 2025, in one chart
Economists said inflation rose in September due to the rise in other essential goods such as gasoline and electricity, while President Donald Trump’s tariffs put pressure on the prices of physical goods such as clothing and furniture.
consumer price indexInflation, a key inflation barometer, rose 3% in September from a year earlier, the Bureau of Labor Statistics reported Friday. That’s an increase from 2.9% in August, but below economists’ expectations.
“Sunflower seed” goods Prices, which exclude volatile food and energy prices, also increased by 3% in September compared to the previous year.
“Inflation is disturbingly high and will accelerate further in the coming months,” said Mark Zandi, chief economist at Moody’s.
The CPI tracks how quickly prices rise and fall on a variety of consumer goods and services, from coffee and bananas to club memberships and concert tickets.
The ongoing government shutdown delayed the release of CPI data until Friday, October 15. Without any other economic data, the report offers a look at the state of the U.S. economy ahead of next week’s Federal Reserve meeting. The CPI announcement also allowed the Social Security Administration to announce 2026 cost-of-living adjustments affecting approximately 75 million people.
Food prices, housing costs, clothing and plane tickets increased in September.
Gasoline prices recorded the biggest increase, increasing by 4.1% compared to the previous month.
‘3 percent mark’
As things stand, inflation is still well above the Fed’s 2% target and remains “stable at that 3% level,” said Mike Pugliese, senior economist at Wells Fargo Economics.
Pugliese said inflation rose rapidly in 2021-22, then slowed but “stuck in the last 12 months.”
From a psychological perspective, “the 3 percent line is a line in the sand,” said Bankrate financial analyst Stephen Kates. “It remains worrying to see inflation rising.”
Tariff impact
“High tariffs increase inflation, as evidenced by high prices for beef and coffee, household goods, appliances and clothing,” Zandi said. he said. Most of these goods are imported from abroad.
Still, long-term inflation expectations are somewhat muted and will likely fall in the second half of next year, Pugliese said, “especially as the one-off hit to higher prices from tariffs fades.”
Tariffs are a tax imposed on imports from foreign countries by U.S. entities importing goods or services. Businesses often bear some of the cost and pass it on to consumers through higher prices.
Economists say the size and scope of the tariff hit is still unclear. But consumers could face an overall average effective tariff rate of 15 percent as trade negotiations continue, according to Zandi. This is around 10% from its current level.
An analysis dated October 17 Budget Lab at Yale It was revealed that current tariff policies in effect are expected to cost each household an average of $1,800 in 2025.
“The transition has been delayed in part because tariffs are ubiquitous and businesses want to wait and see where tariffs go before raising prices,” Zandi said. “Companies don’t want to get caught up in the political buzz, but this transition will happen.”
September inflation information, which was planned to be announced on October 15, was postponed due to the government shutdown and the lack of other economic data.
Bureau of Labor Statistics employees were recalled to release the consumer price index report because it is used to index Social Security cost-of-living adjustments released Friday.
The inflation report is also key for Fed policymakers, as all other data collection and releases have been suspended during the shutdown.
The central bank is expected to cut interest rates by a quarter point at next week’s policy meeting, but this could risk keeping inflation high, economists said.
“When you’re in this data desert that we’re in, you’re going to debate continuing on the path you’re on, and that will mean a rate cut,” Zandi said. “I think they stuck to the script because there was no data.”
Trump has been highly critical of Fed policy and has repeatedly said rates should be cut sharply. Bankrate’s Kates said additional BLS data could support the argument for more cuts, especially if the monthly employment report shows further softening.
“It would be a step backwards to tie the Fed’s hands when the data almost certainly supports the administration’s desired position,” Kates said.
