Annual inflation climbed to 3.7% in September, with energy prices the largest factor, according to federal data reported by CNBC
Gas and diesel prices in Connecticut stood far above year-ago levels, and prices for shelter, used vehicles and apparel also rose
Analysts said the report increased the odds the Federal Reserve would raise interest rates before the end of the year
Inflation saw a rapid increase in September due to the continued elevated cost of fuel caused by Trump’s Iran War, climbing to 3.7 percent over September 2025 and indicating consumers will have little relief from the affordability crisis in coming months.
The Bureau of Labor Statistics’ September report showed annual inflation hitting the 3.7 percent mark, up 0.6 percent from August, CNBC reported. Energy prices were the biggest driving factor, with cost of gasoline jumping 9.1 percent in that time, but they were not the only part of the marketplace adding pressure.
Core inflation, which removes more volatile food and energy prices, rose 0.3% from August and stood at 2.6% for the year. Prices for a number of products, including shelter, vehicles and apparel, were notably up during that period.
Economists expected increases in the month, but both general inflation and the CPI were above their estimates.
In the past year, gas prices grew 34.2 percent while fuel oil soared 74.2 percent. In Connecticut, according to AAA, gas prices for regular stood at $4.40 per gallon as of October 14, up from $3.08 a year ago, while diesel fuel stood at $6.45, just five cents below the all-time high of $6.49 reported on September 28 and almost three dollars higher than $3.76 in October 2025.
Shelter prices rose 0.4 percent in September, used vehicle prices rose 0.7 percent and apparel prices climbed 0.3 percent. Used vehicles and apparel are often affected by tariffs.
Inflation was trending close to the Federal Reserve’s 2% benchmark in early 2025, before Trump imposed global tariffs, and eased again in early 2026 before surging after the Iran war began.
The results contributed to expectations that the Federal Reserve would again raise interest rates by the end of the year. Analysts put the odds of a rate increase in late October at more than 50% and the odds of an increase by year’s end at more than 90%, CNBC reported.
Heating costs grew significantly in September as well, while airfare was up 22.4 percent this year, the New York Times reported.
The new data also showed American wage growth has been roughly zero since Trump took office in January 2025, the Times reported.
By Joe O’Leary
