US Inflation Rises More Than Expected Ahead of Midterm Elections

3-line summary

• US annual inflation rose to 3.7% in the year to September, up from 3.4% in August and above forecasts, in the final CPI release before next month's midterm elections, according to the Bureau of Labor Statistics via BBC. Gasoline prices drove the increase, jumping 34.2% over 12 months and 9.1% in September alone — accounting for more than half of the month's inflation rise — after Middle East energy-supply disruptions from the US-Israel conflict with Iran pushed crude oil from about $70 to over $100 a barrel.
• Overall energy inflation rose 20.4% year-on-year as fuel oil, energy services, and electricity prices climbed. The New York Fed separately found that President Trump's tariffs, including a 10% global tariff introduced after the Supreme Court struck down earlier levies in February, have been largely absorbed by US businesses (nearly 90% of the added cost), with every one-percentage-point rise in average tariffs adding about 0.25% to consumer prices after a year.

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