US Inflation Rises to 3% in September

Annual inflation reached 3% in September, the fastest pace since January, according to data released Friday by the Labor Department. On a monthly basis, consumer prices rose 0.3% from August to September.

The Details: Core prices, which exclude food and energy, increased 0.2% from August and 3% over the past year, both slightly below economists’ expectations of a 3.1% rise. The increase marked a slight uptick from August’s 2.9% annual pace. Housing costs dropped, though tariff-sensitive categories such as apparel, furniture, and sporting goods posted larger increases. Energy prices rose sharply, driven by gasoline, while food costs grew more slowly than in August.

The Role of Tariffs: Inflation has remained above the Federal Reserve’s 2% target for several years, and in recent months, has been driven in part by higher costs for goods affected by tariffs under Trump. The U.S. collected roughly $30 billion in tariff revenue in September, though many businesses have avoided passing on the full cost by using existing inventories or claiming exemptions. The effective tariff rate is estimated to be near 18%, the highest since the 1930s.

For Context: The inflation report was released about ten days late due to the government shutdown, which halted most economic data collection. Officials made an exception for September’s Consumer Price Index (CPI) because the information is needed to calculate annual Social Security cost-of-living adjustments. The White House said that the October inflation report will likely not be published if the shutdown continues.

How the Media Covered It: Wall Street Journal (Center bias) focused on the Federal Reserve's response to the inflation data and how it could influence decisions on interest rates. It also mentioned the impact of tariffs and Trump's immigration policies on price increases. The New York Times (Lean Left) emphasized how the government shutdown delayed key economic data and could create uncertainty for businesses, markets, families, and the Federal Reserve. It also detailed factors driving inflation–from tariffs to the Fed’s policy challenges–and the difficulty of making monetary decisions with limited data. Fox News (Right) emphasized the rise was less than economists expected, and interviewed the National Economic Council Director who said “the market is responding appropriately,” and “inflation is headed in the right trajectory.” It also highlighted coverage from AP News (Left) and a Democratic leader’s remark that “there’s an opening here” in response to the better-than-expected data.

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