US inflation rose to 3.7% in September ahead of midterm elections

US annual inflation rose to 3.7% in September, the Bureau of Labor Statistics reported on Wednesday. The rate was 3.4% in August.

Consumer prices increased 0.6% from August. Core inflation, which excludes volatile food and energy prices, reached 2.6% annually after rising 0.3% in September.

The report was the final inflation reading before the midterm elections. Polls have shown widespread dissatisfaction with the cost of living, while the economy remains a top issue for US voters.

Fuel drove much of the increase

Gasoline prices were 34% higher than a year earlier and accounted for more than half of the overall increase. Fuel oil used for home heating rose 74%, while air travel prices increased 22.4%.

According to AAA, average gasoline prices remain more than $1 a gallon above last year’s level. Diesel, used in domestic supply chains, reached a record high last month.

Pressure on the Trump administration

A Reuters/Ipsos poll found that 78% of Americans blamed the current administration’s policies for inflation outpacing their earnings. The same view was held by 57% of Republicans who support Donald Trump.

Trump has sought to attribute higher prices to the Iranian government. The White House did not immediately respond to a request for comment on the report. Brown University estimated that higher energy prices linked to the war with Iran had cost Americans more than $1,020 per household, or $133 billion in total.

Inflation and Federal Reserve policy

Higher prices add pressure on the Federal Reserve, which uses interest rates to cool inflation. The Fed raised rates last month for the first time since 2023, citing elevated prices.

The 30-year mortgage rate, used for the most common home loans, has risen to 7.40%. Richard Carter of Quilter Cheviot said the higher-than-expected inflation figure was a setback for Trump before the November elections.