Powered by spikes in energy prices, inflation surges to 3.7%

Inflation grew to a 3.7% annual rate in September, according to an Oct. 14 report from the U.S. Bureau of Labor Statistics, up from 3.4% in August. 

In the last consumer price inflation report before midterm elections, with voters already fed up with higher prices, September’s number was the highest since May, when it was 4.2%.

“Inflation has wiped out wage gains for 6 months now,” Heather Long, the chief economist for Navy Federal, wrote in a social media post. “It’s a financial squeeze. Americans are trying to work more hours to make up for it, but many are still falling behind.”

Spikes in energy prices were largely responsible: Gas is now up 34% for the year, and fuel oil, which includes diesel, is up 72% as the Iran war drags on. 

States including Georgia, Kentucky, Illinois, Indiana, North Carolina, Ohio and Utah have enacted gas tax relief measures recently to battle rising prices. North Carolina expects to lose more than $362 million in tax revenue for the fiscal year because of a gas tax holiday. 

New York state estimates fuel oil prices are up 67% from last year, with home heating oil at $6.21 a gallon as of this month. Connecticut announced plans Oct. 13 for additional state aid for home heating assistance, partly because of high prices for delivered oil.  

Other than energy, the largest factor was food away from home, up 3.5%. The only decreases were medical care products, down 3.3%, and used cars and trucks, up for the month but still down 1.5% for the year. So-called “core” inflation outside of volatile food and energy was a more modest 2.6%. 

Stateline reporter Tim Henderson can be reached at [email protected].

This story was originally produced by Stateline, which is part of States Newsroom, a nonprofit news network which includes Missouri Independent, and is supported by grants and a coalition of donors as a 501c(3) public charity.