The Bureau of Labor Statistics reported Wednesday that the U.S. Consumer Price Index (CPI) rose 0.6% in September, bringing the annual inflation rate to 3.6%, both matching consensus expectations. The acceleration from August's 3.4% annual pace was primarily fueled by a 7.1% surge in gasoline prices. Core CPI, which excludes volatile food and energy components, rose 0.2% for the month and 2.5% year-over-year, also in line with analyst forecasts.
The jump in headline inflation outpaced modest wage gains, resulting in a 0.5% decrease in real average hourly earnings for the month. Nominal average hourly earnings grew 0.1% in September. The report serves as a critical final update for the Federal Reserve ahead of its October 27–28 meeting, where officials will evaluate whether to pause or proceed with further tightening following September’s quarter-point rate hike.