Key facts
- Annual inflation accelerated to 3.7% in September, up from 3.4% in August.
- Monthly prices rose 0.6%, driven by a 9.1% increase in petrol costs.
- Shelter costs increased 0.4% month-on-month.
- Food costs were unchanged overall, with grocery prices declining 0.1%.
US consumer prices surged in September, marking the final inflation report before the midterm elections and increasing the likelihood of an interest rate hike by the Federal Reserve this month. Annual inflation accelerated to 3.7%, up from 3.4% in August, with a 0.6% monthly increase. Petrol prices led the surge, rising 9.1% in September and accounting for over half of the monthly CPI increase. Tensions between the US and Iran, as well as Russia and Ukraine, are weighing on global energy prices. Petrol prices averaged $4.33 per gallon, while diesel prices were $6.29 per gallon. Shelter costs also jumped 0.4% month-on-month. Food costs remained unchanged overall, with a decline in grocery prices offset by increases in restaurant meals. Amid heavy investment in AI infrastructure, prices for computer software and accessories have jumped 28% year-on-year. The US central bank last month raised rates by 25 basis points to a target range of 3.75–4.00%. Economists are divided on whether the Fed will raise rates again, with a 52.9% chance of rates remaining steady and a 47.1% chance of a further hike. US markets trended downward following the report, with the Nasdaq falling 0.8% and the S&P 500 dropping 0.6%.