CPI Inflation September 2025:

Prices people pay for a variety of goods and services rose less than expected in September, the Bureau of Labor Statistics reported on Friday, the only official economic data allowed to be released during the government shutdown.

The Consumer Price Index The month showed an increase of 0.3%, putting the annual inflation rate at 3%. Economists surveyed by Dow Jones were looking for respective readings of 0.4% and 3.1%. The annual rate showed a 0.1 percentage point increase from August.

Excluding food and energy, core CPI also showed a 0.2% monthly gain and an annual rate of 3%, compared with respective estimates of 0.3% and 3.1%, the latter unchanged from a month ago. Core CPI recorded an increase of 0.3% in July and August on a monthly basis.

A 4.1% jump in gasoline prices was the biggest contributor to a report that otherwise showed fairly muted inflationary pressures. Food prices rose 0.2%. Commodity prices rose 0.5% overall. On an annual basis, energy grew by 2.8% and food by 3.1%.

Housing costs, which account for a third of the weight in the CPI, rose just 0.2% and rose 3.6% from a year earlier. Excluding shelter costs, services were also up 0.2%.

New vehicles rose 0.8%, but used car and truck prices fell 0.4%.

Stock Market Futures Added to the profit After the release, Treasury yields were slightly negative.

The report provides a glimpse into the state of the US economy after all other data releases have been suspended.

The BLS released the data specifically because the Social Security Administration uses it as a benchmark for cost-of-living adjustments in benefit checks. Otherwise, the Washington, DC CPI was originally scheduled to be released on October 15.

In addition to providing COLA guidance, the CPI release is the final important data point the Federal Reserve will receive before making an interest rate decision next week. The Fed’s inflation target is 2%. The headline measure was below that level in February 2021.

Markets are pricing in near certainty that the central bank will cut its benchmark overnight borrowing rate by a quarter of a percentage point from its current target range of 4%-4.25%. Traders are expecting another cut in December.

However, the trail after that is much shorter.

Concerns remain that President Donald Trump’s tariffs could lead to another round of painful inflation. At the same time, Fed policymakers are concerned that the decline in hiring could spread this year, even as layoffs remain low.

Chair Jerome Powell and his colleagues have struck a generally cautious tone about the pace of rate cuts as they weigh inflationary risks against labor market weakness. For his part, Trump has insisted that inflation is no longer a problem and that the Fed should cut aggressively.

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