For the third straight month, workers’ paychecks did not keep pace with rising prices, the Labor Department’s final inflation report ahead of the midterm elections revealed.
U.S. consumer prices rose 0.6% from the month before in September, above forecasters’ expectations. Over the year, prices for all items were up 3.7%, surpassing August’s 3.4% pace. In comparison, average hourly earnings for employees on private, nonfarm payrolls increased 3% over the year last month.
A 9.1 percent rise in gas prices led the month-over-month increase in prices.
As workers struggle with the cost of living, consumer confidence is sitting at a 12-year low and 52% of Americans surveyed by WalletHub said they believe inflation is going to “ruin” Christmas this year.
Voters may be looking for political candidates who can make their lives more affordable before heading to the polls on Nov. 3, but economists say there is no guarantee that prices will come down any time soon. Several factors are contributing to inflation’s stubbornness, including — but not limited to — war in Iran, tariffs, and the AI buildout.
While those things remain largely out of the Federal Reserve’s control, its policymakers have committed to delivering price stability. They voted to raise the Fed’s benchmark for short-term interest rates to help tame inflation last month. The Labor Department’s September report, which shows year-over-year inflation is still well above the Fed’s 2% target, will help inform their next rate decision on Oct. 28.
(This is a developing story that will be updated to add new information.)
Reach Rachel Barber at [email protected], follow her on X @rachelbarber_, and subscribe to her newsletter “Making More of Your Money” here.
Reporting by Rachel Barber, USA TODAY / USA TODAY
USA TODAY Network via Reuters Connect
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