Prices continued to rise in September, increasing at an annual rate of 3%, according to the latest government inflation report.
The September 2025 consumer price index (CPI) was published approximately two weeks later than usual due to the federal government shutdown, which halted all Bureau of Labor Statistics operations.
Furloughed staff were recalled to prepare the inflation report, which the Social Security Administration relies on to calculate an annual cost-of-living adjustment for benefits. Following the announcement, the government stated that US retirees will receive a 2.8% increase in social security payments in 2026.
Consumer prices increased 0.3% in September 2025, largely driven by a 4.1% increase in gasoline prices.
Forecasts for the report estimated continued increases in inflation, with economists predicting a 0.4% month-over-month increase and 3.1% annual increase.
Consumer prices were up 2.9% in August 2025 from August 2024, after rising 2.7% over the same period in June and July.
The Federal Reserve meets next week and is expected to cut interest rates. The Fed cut rates in September, the first cut since December, amid signs that the hiring is weakening. The US added just 22,000 jobs in August.
The latest inflation report comes as a recent poll conducted for the Guardian shows a clear majority of Americans report their monthly costs have increased between $100 and $749 compared with last year.
Donald Trump campaigned on claims he would “end inflation” and said: “Starting the day I take the oath of office, I will rapidly drive prices down and we will make America affordable again. We’re going to make it affordable again.”
Late last month, Trump told the UN general assembly that “inflation has been defeated”. But inflation remains above pre-pandemic levels and the Federal Reserve’s target of 2%, with Trump’s tariffs driving up the cost of many imported items such as furniture, appliances and toys.
“At least until the full effect of tariffs is passed through to consumers, the inflation rate is more likely to be rising than falling,” wrote Dean Baker, senior economist with the Center for Economic Policy and Research, in a post on what to expect in the September CPI report. “The problem is compounded insofar as new tariffs are imposed, and deportations hit more sectors. Barring a major economic downturn, it is difficult to envision a scenario where inflation hits the Fed’s target any time soon.”
