WASHINGTON — The federal government is scheduled to release new inflation data on Wednesday morning, with economists widely expecting a fresh acceleration in consumer prices driven by climbing energy costs.
The Bureau of Labor Statistics will issue its September consumer price index report at 8:30 a.m. EDT. Forecasters surveyed by Dow Jones expect the headline annual rate to increase to 3.7 percent from 3.4 percent, NBC News reported. On a month-over-month basis, consumer prices are projected to have risen 0.6 percent, matching projections in a separate Reuters survey reported by Oilprice.com, which estimated the 12-month headline rate at 3.6 percent.
Energy markets have remained under severe strain since the U.S. war with Iran began earlier this year. Brent crude, the global benchmark, advanced more than 14 percent in September and traded around $105 per barrel on Tuesday, according to CNBC. High crude costs have pushed retail gasoline prices up 7.1 percent over the past month to a national average of roughly $4.34 per gallon, according to AAA data cited by Oilprice.com. Diesel fuel remains above $6 per gallon, up more than 75 percent since late winter.
“We’ve got real upside risk on the September CPI,” Joe Brusuelas, chief economist at the tax firm RSM, told CNBC, noting that standard forecasting models frequently underestimate inflation during abrupt price shocks.
Spillover into travel and goods
Beyond the fuel pump, rising energy prices are increasingly filtering into broader goods and services. Core inflation, which strips out volatile food and energy costs, is projected to climb to 2.4 or 2.5 percent, according to news reports citing Reuters and Dow Jones surveys.
Airfares have experienced some of the sharpest increases. Economists at Morgan Stanley noted that airfare costs were already up 23 percent year over year, driven by a 90 percent jump in jet fuel prices that represent between 20 percent and 30 percent of carrier operating budgets, NBC News reported.
Other consumer sectors are also contributing to upward price momentum. Morgan Stanley analysts highlighted that Apple’s latest iPhone line, which hit shelves on Sept. 12, carried price increases ranging between 10 percent and 14 percent across models, partly due to soaring memory chip costs tied to artificial intelligence data center construction. Additionally, Goldman Sachs economists projected price increases across the automotive sector, including a 0.5 percent monthly rise for used cars and 0.2 percent gains for both new vehicles and auto insurance, NBC News reported.
Election tensions and the Federal Reserve
The report serves as the final comprehensive look at consumer inflation before the November midterm elections, where control of Congress is at stake. While consumer wage growth held at 3 percent in September, it has trailed the rate of inflation since March, according to NBC News.
President Donald Trump has introduced multiple initiatives aimed at lowering energy expenses, including releasing tax-free diesel reserves and easing sanctions on Russia to facilitate diesel exports. However, analysts surveyed by CNBC expressed doubt that the Russian measures would substantially reduce prices. A Reuters poll reported by Oilprice.com found that 78 percent of Americans blame administration policies, such as tariffs and military action in Iran, for elevated living expenses.
Despite the cost squeeze, consumer spending has persisted. In earnings discussions on Tuesday, top bank executives indicated that household finances remain resilient. Citigroup Chief Executive Jane Fraser remarked that “the consumer is still driving much” of the economy’s momentum, while JPMorgan Chase Chief Executive Jamie Dimon cited “strong business investment and ongoing consumer spending,” NBC News reported.
The central bank raised interest rates last month for the first time in three years. While futures markets monitored by CME’s FedWatch tool anticipate the next rate hike in December, analysts noted that a hotter-than-projected CPI figure could force central bankers to consider immediate action at their policy meeting on Oct. 27-28. Following Wednesday’s report, the government will release the September producer price index on Thursday, with wholesale prices forecast to rise 0.6 percent monthly and 5.5 percent on a 12-month basis, CNBC reported.
