Annual inflation ticked up to 3% in September, the largest increase since January.
The consumer price index (CPI) for September increased 0.3% on a monthly basis and rose 3% for the 12 months ending in September, the U.S. Bureau of Labor Statistics (BLS) reported Oct. 24. That follows the 0.4% monthly rise in August and the month's annual inflation rate of 2.9%.
The index for gasoline rose 4.1% in September and was the largest factor in the all-items monthly increase as the index for energy rose 1.5% over the month, the BLS said. The food index increased 0.2% over the month as the food-at-home index rose 0.3% and the food-away-from-home index increased 0.1%.
The monthly data was originally scheduled to be announced earlier this month but was delayed due to the federal government shutdown.
The 3% annual inflation rate came in just below economists' expectations of 3.1% but is still significant because this is the first time since January that it has crept back up to 3%. Core inflation, which excludes volatile food and energy prices, rose 0.2% monthly and 3% year-over-year, according to the CPI.
Rising annual inflation data "could signify the U.S. is entering a period of stagflation, defined as both rising prices and a weakening economy," said Sydney Ross, economic researcher at SHRM.
"In addition to signs that progress on lowering inflation has stalled in 2025, recent data on employment growth has provided evidence that job growth has slowed at a much faster pace than anticipated after weak July and August jobs reports and significant downward revisions to the May and June data releases," Ross said. "Amid concerns that the labor market is much weaker than previously thought, there are calls for the Federal Reserve to lower the policy rate further when they meet next week."
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