US September CPI report due, with energy costs expected to push inflation higher before midterms

Left · 2The Bureau of Labor Statistics is due to publish its September consumer price index report at 8:30 a.m. Wednesday, 14 October, one of the last such reports before the November midterm elections. 1 2 Left · 2Economists expect annual inflation to have risen from 3.4% in August: to 3.7% in a Dow Jones survey cited by NBC News, and to 3.6% in a FactSet survey cited by the AP. 1 2 Left · 2Both surveys point to a 0.6% monthly increase, which the AP says would be up from 0.4% in August and the biggest jump since April. Core inflation, which excludes food and energy, is forecast at 2.5% a year, up from 2.4% in August, and at 0.2% for the month. 2 1

Left · 2Both outlets attribute much of the pressure to fuel prices after the Iran war began in late February. NBC says diesel is up more than 75% since the war started, oil has risen to more than $105 a barrel from about $80 since August, and regular gas is up more than 45% since late February. The AP says gas prices rose about 9% from August to September and averaged $4.34 a gallon on Tuesday, a few cents above a month earlier. 1 2 Left · 2Airfares are up about 23% from a year ago, and companies are passing on higher costs. PepsiCo said it will raise snack and soda prices to offset fuel, aluminum and ingredient costs. Higher chip and component costs from the AI buildout are lifting electronics prices: the AP cites Nintendo's 11% Switch 2 increase and a roughly 10% higher price for the iPhone 17, while Morgan Stanley economists cited by NBC put iPhone increases at 10%-14%. Goldman Sachs expects higher used car, new car and car insurance prices. 2 1 Left · 2The politics are central to both reports. NBC says higher inflation arrives as early voting begins and Republicans defend House and Senate majorities, with Democrats outperforming in Senate races in Kansas, Iowa and Texas, states hit hard by diesel costs. The AP cites an AP-NORC poll in which 17% of US adults approve of President Donald Trump's handling of the cost of living and 26% approve of his handling of the economy, a new low. 1 2

Left · 1NBC reports that Trump has tried to lower fuel prices by pressing G7 allies to release diesel stocks, allowing wider use of tax-free diesel, and announcing a deal with Russian President Vladimir Putin on diesel supplies that involved easing some sanctions and drew global backlash. NBC says none of these measures has made much difference so far. 1 Left · 2The data matters for the Federal Reserve, which raised rates for the first time in three years, to about 3.9%, last month. Chairman Kevin Warsh said then that "inflation is too high and has been for too long." The Fed meets 27-28 October. The AP says most Wall Street investors expect a hold then and possibly a hike in December, while NBC says a hotter-than-expected reading could prompt a hike at that meeting. Fed Governor Christopher Waller said he expects more hikes but with flexibility on timing. 2 1 Left · 2The AP notes that much of the current inflation stems from supply shocks that higher interest rates cannot fix. NBC adds that wage growth was 3% as of September and has not outpaced inflation since March, though the chief executives of Citigroup, Wells Fargo and JPMorgan Chase said consumers keep spending steadily. 2 1