US consumer prices rose 3.7 per cent in September from a year earlier, above forecasts, the Bureau of Labor Statistics said on October 14. Gasoline jumped 9.1 per cent in the month.
Inflation Beats Forecasts
The consumer price index rose 0.6 per cent in September from August, the US Bureau of Labor Statistics said on Wednesday. That was the biggest monthly gain in five months, according to the Associated Press. The annual rate rose to 3.7 per cent from 3.4 per cent in August.
Economists surveyed by Dow Jones expected a 0.6 per cent monthly rise and a 3.6 per cent annual rate, CNBC reported. The monthly figure matched forecasts, but the annual rate came in higher.
Core Inflation Edges Up
Excluding food and energy, core CPI rose 0.3 per cent for the month. It was up 2.6 per cent from a year earlier, against an estimate of 2.5 per cent. The core annual rate was 2.4 per cent in August.
Price pressures spread beyond the pump. CNN reported that inflation rose more broadly than expected, with higher costs for car repairs, medical visits, airline tickets and other items.
Energy Drives the Increase
Gasoline prices rose 9.1 per cent in September. That accounted for more than half of the monthly increase in the index, the Bureau of Labor Statistics said. The energy index rose 5.2 per cent in September after a 2.1 per cent rise in August.
Energy prices are up 20.4 per cent from a year ago amid the war with Iran, Forbes reported.
The annual CPI rate has moved this year as follows:
- January and February: 2.4 per cent
- March: 3.3 per cent
- April: 3.8 per cent
- May: 4.2 per cent
- June: 3.5 per cent
- July and August: 3.4 per cent
- September: 3.7 per cent
The index level was 336.940 in September, according to US Inflation Calculator, which reproduces the BLS data. These annual rates are not seasonally adjusted. The monthly gains of 0.1 per cent in July and 0.4 per cent in August are seasonally adjusted.
Fed Decision Looks Harder
Axios said the report shows the inflation fight is far from over and makes further Federal Reserve rate hikes more likely. The Center Square quoted an economist who said inflation pressures are broadening beyond energy, which could keep interest rates elevated. The economist said the report complicates the Fed’s decision this month.
The September jobs report, released on October 2, showed wage growth slowing to 3 per cent. That is below the inflation rate, so prices are rising faster than pay.
The report was the last major snapshot of consumer prices before the US midterm elections. The next CPI release is due on November 10 and will cover October.
Why It Matters for India
Indian markets are exposed to US inflation through the dollar, US bond yields and crude oil. PTI reported that foreign investors sold Indian equities in October amid elevated crude oil prices, a firmer US dollar and higher US bond yields. They pulled ₹44,166 crore from Indian equities in the first part of the month, and net outflows for 2026 stand at ₹3.04 lakh crore.
The rupee closed at a record low of 96.88 on October 8, then recovered after the RBI announced support measures on October 10. A market ticker showed the dollar at ₹95.09 on Thursday morning, according to Goodreturns.
Goodreturns said gold and silver rates in India were likely to stay volatile after US CPI came in higher than expected. It said spot gold traded above $4,140 an ounce and spot silver above $56 on Thursday morning, after crude oil halted a five-day rally.
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Indian Equities Slipped on Wednesday
The Nifty 50 closed at 22,622.70 on Wednesday, down 99.25 points or 0.44 per cent. The Sensex settled at 72,781.89, down 251.89 points or 0.34 per cent. Banking stocks stayed under pressure, while gains in IT and FMCG shares limited the decline.
Brent crude futures traded at $106.58 a barrel early on Wednesday, Reuters reported. The Houthi attacks on Saudi Arabia kept supply worries alive, even as more Russian diesel headed to world markets.
