US Inflation Rises to 3.7% in September as Gasoline Prices Jump 9.1%

The Consumer Price Index (CPI) for all urban consumers rose 0.6% in September on a seasonally adjusted basis, after a 0.4% increase in August, the U.S. Bureau of Labor Statistics (BLS) said in a release published October 14, 2026. Over the 12 months through September, the all-items index was up 3.7% before seasonal adjustment, compared with 3.4% in August.

Core CPI, which excludes food and energy, rose 0.3% for the month and 2.6% over the year, up from 2.4% annually in August, according to BLS data. CBS News reported that the 3.7% annual headline figure exceeded economists' expectations of 3.6%, and The Motley Fool said the core reading also came in about 0.1 percentage point above forecasts.

Gasoline Drove Half the Increase

Energy prices rose 5.2% in September and were up 20.4% from a year earlier, BLS data show. Within that category, gasoline prices alone climbed 9.1% in the month and 34.2% over 12 months, following a 27.4% annual increase recorded in August. CBS News reported that gasoline accounted for roughly half of the month's overall CPI gain, citing the same BLS figures.

CBS News also cited a national average gasoline price of $4.33 per gallon, up from $2.98 before what the outlet described as a war, and a diesel price of $6.29 per gallon that hit record highs in late September. Food prices were unchanged on the month but up 2.5% over the year, per BLS data.

Other Categories

Shelter costs rose 0.4% in September and were up 3.2% over the year, according to BLS figures. Used cars and trucks increased 0.7%, apparel rose 0.3%, and airline fares jumped 1.2% for the month and were up 22.4% over the year. Medical care rose a more modest 0.1% monthly, after falling 0.2% in August.

Fed Rate-Hike Odds Rise

The Federal Reserve raised its benchmark rate range to 3.75%-4% in September and signaled further increases could follow, with two policy meetings left this year, CBS News reported, citing comments from Thrivent's David Royal that inflation remains well above the Fed's target and that the current rate-hiking cycle is not likely to end soon.

Market-implied odds of a rate hike at the Fed's October meeting rose after the CPI release, though the two outlets cited different figures: CBS News reported odds rising from about 20% to about 50%, while The Motley Fool, citing the CME Group's FedWatch tool, put the move at about 22% to nearly 44%. A Carson Group strategist cited by The Motley Fool, identified as Sonu Varghese, said core inflation was running at an annualized pace of 3.7% in September and that the increase was not limited to fuel costs.

What's Not Yet Known

BLS has not yet published the October CPI report, so it is not yet known whether gasoline prices and headline inflation will continue rising at the same pace. The Federal Reserve's next policy decisions, covering two remaining meetings this year, had not been announced as of the September CPI release.