Friday, October 30, 2026

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Inflation Rose to 3.6% in September as Gas Prices Pushed Costs Higher Days Before Midterms

The Commerce Department's preferred gauge rose 0.5% in September, the largest monthly gain since May. Core inflation, which excludes food and energy, ran at 3.1%.

By PAUL CHRISTLE · Updated · 1 min read 1 source listed below
A gas station sign displaying fuel prices (file photo)
Photo: MarkyNark / Wikimedia Commons (CC BY-SA 4.0)

Facts

  • Inflation rose to 3.6% in September from 3.4% in August, measured by the year-over-year change in prices, the Commerce Department reported on Thursday, October 29, 2026, according to the Associated Press.
  • Prices rose 0.5% from August to September, up from 0.3% the month before. The AP said it was the largest monthly gain since May.
  • Core inflation, which excludes volatile food and energy prices, was 3.1% over the past year, up from 3.0% in August. Core prices rose 0.3% in September, the same as in August.
  • Gas prices drove much of the increase. The AP said renewed Middle East violence has kept oil above $100 a barrel, compared with below $70 before the Iran war. Gas averages about $4.25 a gallon nationally, according to the AP.
  • Prices also rose beyond fuel. Shipping, hotel rooms and utilities climbed quickly from August to September, the AP reported.
  • Inflation-adjusted after-tax incomes fell 0.3% in September, the AP reported. Consumers appear to be drawing on savings or credit to keep spending.
  • The Federal Reserve left its key interest rate unchanged the day before the report. The AP said strong growth and persistent price increases make a rate hike more likely than a cut when the Fed meets in December. That is the AP’s assessment of the outlook; the Fed has not announced a decision.
  • Cost of living is a central issue in the midterm elections on Tuesday, November 3. The AP reported that polls show rising prices have soured most voters on the economy and that they give President Donald Trump poor marks on prices. In 2024, Trump campaigned on lowering living costs, including bringing gas below $2 a gallon, the AP noted.
  • These figures are as described by the AP; the Commerce Department’s own release was not available for this report.

Quotes

Ksenia Bushmeneva, an economist at TD, said: “Underlying pressures are also broadening.”

Bushmeneva also warned: “Together with higher borrowing costs, these headwinds are likely to weigh on consumer demand in the coming quarters.”

Source Read the Associated Press report on PBS NewsHour here.

Image Gas station with pricing sign by MarkyNark, licensed under CC BY-SA 4.0.

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