US consumer prices rise less than expected before Fed decision

As inflationary pressures continue to weigh on the domestic economy, consumer prices in the United States decreased less than expected in September.

Prices increased by 0.3% in September from the previous month, a slowdown from the 0.4% increase in August, according to the consumer price index (CPI) report released by the Bureau of Labor Statistics on Friday.

The CPI increased by 3% in comparison to the same period last year. A 2.9% increase was reported in the last month’s report.

The price of gasoline, which increased by 4.1 percent per month, was the main driver of the increases. Over the same time period, the energy index increased by 1.5 percent overall. After rising by 0.5% on a monthly basis in August, food prices increased by 0.2% in September.

After rising 0.3% in August, prices for items and services other than food and energy, such as clothing, travel, household, and shelter, increased by 0.2% on a month-ahead basis in September.

The Federal Reserve meeting is scheduled for next week, when the central bank is anticipated to cut its benchmark interest rate by another 25 basis points to 3.75 percent or 4.

According to Heather Boushey, senior research fellow at the Harvard Kennedy School’s Reimagining the Economy Project, “Today’s release of new consumer price index data shows an economy where prices continue to rise faster than the Federal Reserve’s preferred pace.”

The government shutdown, however, resulted in a partial economic data blackout, with more than half of US economic data unavailable, making the central bank use only limited data to gauge interest rates.

There was a change in the CPI report. It is used to assist the US Social Security Administration in making its initial cost-of-living adjustment, which was due on October 15. The Social Security Administration announced that beneficiaries will see a 2.8% increase in monthly payments in 2026 after the release of the CPI data on Friday.

Before the government shutdown, a large portion of the information was released. The Bureau of Labor Statistics already faces budgetary and staffing constraints, which means that the data for the November reports is not being collected. This poses challenges for economists in the months to come.

According to Boushey, the Trump administration’s inability to develop a coherent economic strategy could cause the country’s economy to turn around.

Due to the shutdown, the White House stated that the federal government wouldn’t release inflation data until next month.

On X, the social media platform that was formerly known as Twitter, the White House stated, “Surveyors cannot deploy to the field – depriving us of critical data.”