US consumer prices rose 3.7% year-on-year in September 2026, up from 3.4% in August, according to the Bureau of Labor Statistics. The increase was driven largely by a 9.1% monthly jump in gasoline prices, tied to a global diesel shortage linked to the Iran war and disruptions to Russian refineries. The report, the last major inflation reading before the November 3 midterm elections, has intensified expectations that the Federal Reserve could raise interest rates again.
The US Consumer Price Index (CPI) rose 0.6% in September 2026 from the previous month and 3.7% compared with a year earlier, the Bureau of Labor Statistics (BLS) reported on October 14. The annual rate was up from 3.4% in August, marking an acceleration in headline inflation.
What the September CPI report shows
According to the BLS release, core CPI — which excludes food and energy — rose 0.3% on the month and 2.6% over the year, the same monthly pace as August. The energy index climbed 5.2% for the month and 20.4% year-on-year, mainly because of petroleum costs. Shelter costs rose 0.4% in September after a 0.3% rise in August, for a 3.2% annual increase. The food index was unchanged on the month and up 2.5% over the year.
BLS Consumer Price Index, September 2026
Category
Monthly change
12-month change
Headline CPI
+0.6%
+3.7%
Core CPI (ex. food & energy)
+0.3%
+2.6%
Energy index
+5.2%
+20.4%
Gasoline
+9.1%
+34.2%
Shelter
+0.4%
+3.2%
Food
0.0%
+2.5%
Why gasoline and diesel prices surged
The BLS said gasoline alone rose 9.1% in September and accounted for more than half of the month's overall price increase, with pump prices up 34.2% from a year earlier. The jump is linked to a wider diesel and middle-distillate shortage that the International Energy Agency (IEA) says began with the Iran war, according to reporting by The National News. The IEA identified disruptions to export routes from the Gulf and Ukrainian drone strikes damaging Russian refineries. Combined gas-oil exports from the Middle East and Russia fell more than 60% year-on-year, a loss of about 1.3 million barrels a day.
The National News reported that wholesale diesel prices reached roughly $220 a barrel in Europe and the US, while US pump prices for diesel topped $6 a gallon in September — about 70% higher than before the conflict began. US diesel stocks hit a 14-year seasonal low, and European inventories reached a 25-year low in July.
Further cuts in consumption and the heavy economic costs these will entail may be needed to balance the market.
— International Energy Agency, cited by The National News
The IEA said it does not expect diesel inventories to recover until the second half of 2027.
Political stakes before the midterm elections
The CPI report landed three weeks before the November 3 midterm elections. Al Jazeera cited a Reuters/Ipsos poll showing about 78% of Americans blamed President Donald Trump's policies for rising prices, adding political pressure on Republican candidates. Kyle Moore, chief economist at The Century Foundation, told Al Jazeera: "The directionless war in Iran continues to disrupt global supply chains, driving up the prices of food and fuel." US stock markets fell after the release, with the Nasdaq down 0.8% and the S&P 500 down 0.6%, according to Al Jazeera.
What it means for consumers and the Fed
For households, the clearest effect is at the pump and on shelter: gasoline and diesel costs feed into transport and delivery prices, while shelter — the largest single CPI component — kept climbing at 3.2% annually. Al Jazeera reported that the hotter-than-expected reading fuelled fears that the Federal Reserve will raise interest rates again, which would raise borrowing costs on mortgages, credit cards and auto loans. No Fed decision has been made as of this report; the central bank's next policy meeting follows the CPI release.
The BLS data and IEA analysis both point to energy — specifically gasoline and diesel — as the main driver of the September acceleration, rather than a broad-based rise across most goods and services, since core inflation held steady at the same monthly pace as August.
Questions
Why did US inflation rise in September 2026?
The Bureau of Labor Statistics said the increase to 3.7% annually was driven mainly by a 9.1% monthly jump in gasoline prices, linked to a global diesel shortage tied to the Iran war and disruptions to Russian refineries.
What is core inflation and why does it matter?
Core CPI excludes food and energy to show underlying price trends; it rose 2.6% year-on-year in September, the same monthly pace as August, according to the BLS, suggesting the broader economy did not accelerate as sharply as the headline figure.
How does the diesel shortage affect prices?
The IEA says disruptions to Gulf export routes and Ukrainian drone damage to Russian refineries cut global diesel supply by about 1.3 million barrels a day, pushing US diesel pump prices above $6 a gallon in September, according to The National News.
Will the Federal Reserve raise interest rates because of this report?
No decision had been announced as of this report. Al Jazeera said the hotter inflation reading fuelled market expectations of a possible rate increase, which would raise borrowing costs for consumers.
How long will the diesel shortage last?
The IEA, as reported by The National News, said diesel inventories are unlikely to recover until the second half of 2027.
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