US September Consumer Prices Rise 3% Amid Tariffs Ahead Fed Meeting

In September 2025, U.S. inflation rose to 3 percent annually, the highest since January, driven largely by a 4.1 percent monthly surge in gasoline prices and increases in energy and food costs. The Consumer Price Index (CPI) increased 0.3 percent from August, slightly below economists' expectations, with core inflation (excluding food and energy) rising 0.2 percent, reflecting a slowdown in shelter cost growth and a moderation in some service prices like housing. Tariff-related price increases impacted consumer goods, notably apparel and appliances, though used vehicle prices declined. Despite the inflation uptick, the Federal Reserve is expected to lower interest rates to around 3.75-4 percent to support economic growth amid ongoing data challenges caused by the government shutdown. White House officials viewed the slightly lower-than-expected inflation as positive news for American families but warned that continued shutdowns could disrupt future economic data reporting. Overall, inflation remains elevated above the Fed's 2 percent target, presenting a complex economic environment where price pressures persist but growth and hiring remain steady yet cautious.