Rising Gasoline Prices Drive Fresh U.S. Inflation Fears

A surge in energy costs is expected to drive overall U.S. consumer inflation higher, with September numbers seen at 0.6% on a monthly basis according to economists polled by Reuters. Official Consumer Price Index data for September is scheduled for release later today.

Energy Prices and Consumer Impact

Gasoline prices in the United States increased by 7.1% last month, with the latest daily average national price reaching $4.3413 per gallon, according to AAA. This figure remains close to the average recorded a month prior, with a difference of $0.028 per gallon. Meanwhile, diesel prices remain elevated above $6 per gallon, though they have pulled back from all-time highs of over $6.50 per gallon.

A Reuters poll indicated that 78% of Americans blame specific policies, including the war in Iran and import tariffs, for the rising cost of living. Sung Won Sohn, professor of finance and economics at Loyola Marymount University, noted in an interview with Reuters that voters heavily feel daily expenses related to food and energy, impacting lower-income segments within a K-shaped economic environment.

Inflation Readings and Targets

Additional data reported by Reuters showed that the inflation reading for the 12 months leading to September stood at 3.6%, remaining significantly above the Federal Reserve's 2% target. Core inflation, which excludes volatile energy and food prices, came in at a more moderate 2.4% for the same 12-month period.

Key facts

• Economists polled by Reuters projected September U.S. consumer inflation at 0.6% on a monthly basis.
• U.S. gasoline prices rose 7.1% last month, reaching a daily national average of $4.3413 per gallon according to AAA.
• Diesel prices remained above $6 per gallon, down from all-time highs of over $6.50 per gallon.
• The 12-month inflation reading to September stood at 3.6%, while core inflation reached 2.4%.
• Roughly 78% of Americans blamed policies such as import tariffs and the conflict in Iran for rising living costs in a Reuters poll.