Catenaa, Wednesday, October 14, 2026- US inflation rose more than expected in September as oil prices continue to pressure consumers ahead of US midterm elections.
Consumer prices rose 3.7% in September from a year earlier, the Labor Department said Wednesday; economists surveyed by The Wall Street Journal estimated inflation at 3.6%.
WSJ said that core prices excluding food and energy rose 2.6%, above forecasts for a 2.5% increase.
The figures underscore the lingering impact of the Iran war on petrol prices and the persistence of inflation, which fell sharply from a 9.1% peak in 2022 but has risen since the war began in late February.
At the last Fed meeting, Chairman Kevin Warsh said that he doesn’t want to make interest-rate decisions based on one month’s inflation reading.
But according to the WSJ, economists are still watching this release for clues on the Fed’s direction, and inflation data could shift market expectations for where Fed rates are headed.
The Fed raised interest rates last time, the first hike since 2023, as it has shifted its focus from boosting the labor market to fighting inflation, and Fed officials indicate there could be more than one rate hike in 2026.
The Wall Street Journal reported that resilient consumer demand may be contributing to persistent inflation. Continued household spending, supported by employment conditions and financial-market gains, has given some businesses greater scope to increase prices.
Commerce Department also revealed that consumer spending was up by 2.6% in August from a year earlier, even after adjusting for inflation.
Regions Financial Chief Economist Richard Moody told WSJ that supply challenges like the closure of the Strait of Hormuz, tariffs and a shortage of workers in some industries have been a bigger driver of inflation. “Ultimately it’s a supply-side story,” he said.
The boom in data-center construction has also contributed to inflation by pushing up the prices of semiconductors and other goods, according to WSJ.
The report suggested that tighter monetary policy may have limited influence on some AI infrastructure projects. Major technology companies could continue expanding data-center capacity despite higher financing costs if they expect sufficient long-term returns.
Data-center builders show “much less price sensitivity and much greater sense of urgency around delivery,” Cleveland Fed president Beth Hammack said in a recent interview, according to WSJ.
