U.S. annual inflation unexpectedly rises to 3.7% in September

U.S. annual inflation rose to 3.7% in September, above the expected 3.6% and up from 3.4% in August. Core inflation rose 2.6%, also above forecasts. The data strengthens expectations that the Fed will keep interest rates unchanged at the end of October.

U.S. annual inflation rose to 3.7% in September, above the expected 3.6% and up from 3.4% in August. The monthly Consumer Price Index rose 0.6% as expected. Core inflation, excluding food and energy, rose 2.6%, above the forecast of 2.5% and up from 2.4% in August. The data strengthens expectations that the Fed will keep interest rates unchanged at its meeting at the end of October. This comes against the backdrop of a disappointing September jobs report, with only 29,000 jobs added, while the unemployment rate unexpectedly rose to 4.2%. Gasoline prices jumped 3.9% on an annual basis, accounting for more than a third of the increase in the index. The energy index rose 2.1%. The article notes that a month ago, the Fed raised interest rates to 4%, the first time since 2023, and that most committee members assessed there would be another rate hike by the end of the year.