U.S. Inflation Rises to 3.7% in September, Driven by Energy Costs

U.S. inflation rose to 3.7% in September, according to data released by the Bureau of Labor Statistics, marking the highest rate before a midterm election since 1990, with the exception of the pandemic. The consumer price index increased 0.6% last month, fueled by a 20.4% year-over-year increase in energy prices, particularly gasoline, which rose 34.2% and accounted for over half of the monthly CPI increase. Fuel oil prices jumped 74% year-over-year, while air travel costs increased by 22.4%. Core inflation, excluding food and energy, rose to 2.6% annually.

The increase in energy prices is largely attributed to the ongoing conflict in the Middle East and Russia’s war with Ukraine. Average gas prices are over $1.00 per gallon higher than last year, reaching $4.33 on Wednesday, while diesel hit a record high of $6.29 a gallon. These higher costs are impacting household budgets, with Brown University estimating an average cost of over $1,020 per household and a total of $133 billion for all U.S. consumers.

Republicans are entering the midterm elections with this elevated inflation rate, and a Reuters/Ipsos survey indicates that 78% of Americans blame the current administration’s policies for inflation outpacing earnings, including 57% of Republicans. The Trump administration has attributed rising prices to the Iranian government, while the White House has not yet commented on the latest report. The Federal Reserve raised interest rates last month, citing elevated prices, and may increase them further.

While most sources agree on the core facts of the inflation increase, framing differs. Left-leaning outlets emphasize the impact on household budgets and blame the administration's policies, while right-leaning coverage highlights the role of global conflicts and the potential for further increases. Center sources present the data with less overt framing, focusing on the economic implications.

Where they differ

• The Guardian and CBS News emphasized the dissatisfaction among voters and the potential political impact of inflation, while the New York Post focused on the implications for Federal Reserve interest rate hikes.
• The Hill presented the data in a more neutral tone, focusing on the numbers themselves, whereas the Guardian and CBS News included more analysis of the underlying causes and consequences.
• The New York Post highlighted the fact that inflation rose more than expected, framing it as a negative surprise, while other sources simply reported the 3.7% figure.
• CBS News included an analyst quote noting that energy prices may not head lower anytime soon, while other sources did not offer similar expert opinions.

What is not yet known

• The long-term impact of the wars in the Middle East and Ukraine on energy prices remains uncertain.
• The extent to which the Federal Reserve will raise interest rates to combat inflation is still to be determined.

Background

• The Consumer Price Index (CPI) measures the average change over time in the prices paid by urban consumers for a basket of consumer goods and services [background knowledge].
• In September 2026, the Federal Reserve raised interest rates by 0.25% to a range of 3.75% to 4.00% in response to persistent inflation [Fact Refinery, 2026-09-16].
• The US economy added 162,000 jobs in August 2026, with the unemployment rate remaining at 4.1% [Fact Refinery, 2026-09-04].
• Conflicts in the Middle East and Russia’s war with Ukraine are contributing to inflationary pressures, particularly in energy markets [Fact Refinery, 2026-09-17].
• Former President Trump has publicly called for the Federal Reserve to lower interest rates, even to 1% or less [Fact Refinery, 2026-09-16].

Our reading

Our reading is that the current inflationary pressures, while driven by global events, are acutely felt domestically and are poised to become a significant political issue leading into the midterm elections. The data suggests a complex situation where energy costs are the primary driver of the increase, but core inflation remains elevated. The differing framing from media outlets indicates a recognition of the political sensitivity of the issue, with each side emphasizing aspects that support their narrative.

What to watch

• The next meeting of the Federal Open Market Committee and any further adjustments to interest rates [Federal Reserve website].
• November’s CPI data release, to see if the September increase was a temporary spike or the start of a sustained trend [Bureau of Labor Statistics website].
• Results of the midterm elections and whether voters prioritize economic concerns over other issues [election results reporting].

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