HomeInflationU.S. Inflation Remains Unchanged at 3.7% Over the 12 Months Ending September

U.S. Inflation Remains Unchanged at 3.7% Over the 12 Months Ending September

Inflation in the United States increased in September, although the rise was not as significant as it was in August, as reported by a U.S. government release on Thursday, Oct. 12. Consumers’ pocketbooks continued to be pressured by higher shelter prices, which accounted for over half of the gain, in addition to rising gasoline costs.

In the headline monthly figure, U.S. consumer prices increased 0.4% in September, after rising by 0.6% in August, the Labor Department said in its monthly report on the Consumer Price Index (CPI). The CPI is a closely watched inflation gauge that measures what Americans consumers pay for everyday items, ranging from coffee to cars.

For the third consecutive month, overall food prices experienced a 0.2% increase. Within the food category, grocery prices climbed by 0.1%, compared to the previous 0.2% rise. Additionally, dining-out expenses continued to rise at a faster pace, increasing by 0.4% compared to the previous month’s 0.3% uptick.

Meanwhile, food inflation over the past year remained elevated at 3.7%, but lower than the previous rate of 4.3%. During this same period, grocery prices increased by 2.4%, while the cost of food consumed outside of the home rose by 6%. These figures compare to their respective previous rising rates of 3% for groceries and 6.5% for dining out.

In other sectors, prices at the pump advanced by 2.1% in September, contrasting somewhat to 10.6% jump in August.

When looking at a year-on-year comparison, gas prices rose by 3%, compared to the previous decrease of 3.3%. To offer some context, the inflation rate for gasoline over the 12 months ending in June 2022 surged by 59.9%, marking the highest level since March 1980.

The broader energy index, encompassing items such as gasoline, electricity, and fuel oil, saw a 1.5% increase in the month of September, following a rise of 5.6% in August. Energy prices year-over-year decreased by 0.5%, which compares to the previously recorded fall of 3.6%.

Excluding the volatile food and energy components, the rate of core consumer prices in September rose by 0.3% for a second month in a row.

Shelter or housing prices exhibited a high 0.6% growth for the month — their 41st consecutive monthly increase, after rising 0.3% in August, while recording another significant year-over-year advance of 7.2%.

"The index for shelter was the largest contributor to the monthly all items increase, accounting for over half of the increase," the Labor Department’s monthly report said.

For recent 12-month comparisons, they achieved gains of 7.3% in August, 7.7% in July, 7.8% in June, 8% in May, 8.1% in April, and 8.2% in March, marking their most significant 12-month increase since June 1982.

Components of shelter include prices of items like rent for apartments, rental equivalence, lodging away from home such as hotels and motels, and housing at schools. This index accounts for about one-third of the entire CPI.

In other closely watched pricing areas:

  • Clothing prices fell by 0.8% for the month after rising 0.2% previously. They climbed by 2.3% compared to a year ago.
  • New vehicle prices rose by 0.3% for a second consecutive month. They exhibited a year-over-year increase of 2.5%.
  • Prices for used cars and trucks fell for a fourth straight month, down 2.5% after falling by 1.2% in August. In comparison to prices from a year ago, they have dropped by 8%. These rates stand in stark contrast to the situation in February of the previous year when they experienced a substantial year-on-year increase of 41.2%.
  • When compared to the previous year, airline fares tumbled by 13.4%. As for the month, they edged 0.3% higher, after dropping 4.9% in August.

In terms of the headline annual rate, inflation increased by 3.7% from a year earlier, matching the rate reported previously.

For some perspective, there was a notable peak in the inflation rate at 9.1% during the 12-month period ending in July 2022. It was the quickest rate of inflation since November 1981. Additionally, until March of this year, inflation rates had been at or above 6% for seventeen consecutive months.

Meanwhile, core inflation increased by 4.1% over the past year, down a from 4.3% previously. This core, "all items less food and energy" index is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) to guide the central bank in setting its key interest rate. For a second instance, the current pace is the slowest since September 2021.

"The September CPI report is not a good one for the Fed, but will keep the U.S. central bank in wait-and-see mode as it weighs bumpier progress on both disinflation and labor rebalancing in a context of firmer than expected growth against the additional drag from the step-up in yields over recent months," said economists at Evercore ISI led by Fed-watcher Krishna Guha, in a note reported by MarketWatch.

As recently as last September, the core inflation rate at 6.6% was the highest since August 1982. Many economists consider the core reading as a better predictor for future inflation.

The following table of key inflation figures is for the last seven months through September, as published by the U.S. Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) on Oct. 12, 2023. To index the data each month, the BLS monitors the prices of about 80,000 consumer goods and services from around the nation. All monthly and annual pricing changes are in percentages.

March 2022 to September 2023 Consumer Prices – Gains & Losses in Percent
(Seasonally Adjusted from Prior Month and Unadjusted 12-Month)

  Mar 2023 Apr 2023 May 2023 June 2023 July 2023 Aug 2023 Sept 2023 12 Month
All items 0.1 0.4 0.1 0.2 0.2 0.6 0.4 3.7
  Food 0.0 0.0 0.2 0.1 0.2 0.2 0.2 3.7
    Food at home -0.3 -0.2 0.1 0.0 0.3 0.2 0.1 2.4
    Food away from home 0.6 0.4 0.5 0.4 0.2 0.3 0.4 6
  Energy -3.5 0.6 -3.6 0.6 0.1 5.6 1.5 -0.5
    Energy commodities -4.6 2.7 -5.6 0.8 0.3 10.5 2.3 2.2
      Gasoline (all types) -4.6 3 -5.6 1.0 0.2 10.6 2.1 3
      Fuel oil -4 -4.5 -7.7 -0.4 3.0 9.1 8.5 -5.1
    Energy services -2.3 -1.7 -1.4 0.4 -0.1 0.2 0.6 -3.3
      Electricity -0.7 -0.7 -1 0.9 -0.7 0.2 1.3 2.6
      Utility (piped) gas service -7.1 -4.9 -2.6 -1.7 2.0 0.1 -1.9 -19.9
  All items less food, energy 0.4 0.4 0.4 0.2 0.2 0.3 0.3 4.1
    Commodities less food, energy 0.2 0.6 0.6 -0.1 -0.3 -0.1 -0.4 0
      New vehicles 0.4 -0.2 -0.1 0.0 -0.1 0.3 0.3 2.5
      Used cars and trucks -0.9 4.4 4.4 -0.5 -1.3 -1.2 -2.5 -8
      Apparel 0.3 0.3 0.3 0.3 0.0 0.2 -0.8 2.3
      Medical care 0.6 0.5 0.6 0.2 0.5 0.6 -0.3 4.2
    Services less energy 0.4 0.4 0.4 0.3 0.4 0.4 0.6 5.7
      Shelter 0.6 0.4 0.6 0.4 0.4 0.3 0.6 7.2
      Transportation 1.4 -0.2 0.8 0.1 0.3 2.0 0.7 9.1
      Medical care -0.5 -0.1 -0.1 0.0 -0.4 0.1 0.3 -2.6


The BLS releases inflation data around the middle of the month for consumer prices surveyed up to the previous month. The Consumer Price Index (CPI) for October and the latest annual period will be made public on Nov. 14, 2023.

The CPI data is also used to calculate inflation rates and to power this site’s U.S. Inflation Calculator. The U.S. Inflation Calculator displays the cumulative inflation and the change in the buying power of the U.S. dollar over time.


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