BridgeWorks
The Bureau of Labor Statistics released September's Consumer Price Index yesterday, and the gas pump story we described last month has gotten bigger. Prices rose 0.6 percent in September and are up 3.7 percent over the past twelve months, up from 3.4 percent in August.
The numbers
- All items: +3.7 percent over twelve months, +0.6 percent for the month
- Core, excluding food and energy: +2.6 percent over twelve months, +0.3 percent for the month
- Gasoline: +9.1 percent in September alone, and +34.2 percent over the year
- Energy overall: +20.4 percent over the year
- Food: flat for the month, +2.5 percent over the year. Groceries slipped 0.1 percent in September; restaurant prices rose 0.2 percent.
- Shelter: +3.2 percent over the year
- Electricity: +4.4 percent over the year
- Airline fares: +22.4 percent over the year
BLS says gasoline accounted for more than half of September's overall increase.
What changed from August
In August, the story was almost entirely energy: headline inflation at 3.4 percent, but core at 2.4 percent and fairly calm. September is still mostly an energy story. Gasoline went from 27 percent above last year to 34 percent.
The difference is that core inflation edged up too, from 2.4 to 2.6 percent. That is not a dramatic move, and one month doesn't make a trend. But it is the number economists use to judge whether high energy costs are starting to spread into everything else, and it moved in the wrong direction.
What it means if you are working, or looking
For the people we work with, the core figure matters less than the pump. Gasoline is not an optional purchase for someone who drives to a warehouse shift, a job site or a training class. A 34 percent increase in a year is a real cut in take-home pay, and it falls hardest on people with long commutes and older, less efficient cars.
It also lands at an awkward moment. Hiring is slow, with just 29,000 jobs added in September, and people who lose a job are taking longer to find the next one, sometimes longer than their unemployment benefits last. Higher gas prices make an already long search more expensive.
A few practical points:
- Count commuting costs when you compare job offers. A slightly higher-paying job 30 miles farther away can pay less once you account for fuel.
- Ask about transportation support. Some employers and training programs help with transit passes or fuel. Our support services team can help with transportation costs for people in our programs.
- Groceries are not the problem right now. Food prices were flat in September and grocery prices are up less than 2 percent on the year, so if your budget is under pressure, the squeeze is coming from energy and housing, not the checkout line.
What to watch
The Federal Reserve meets October 27 and 28, after raising rates in September for the first time since 2023. Higher headline inflation and a small rise in core will weigh in favor of another increase, while the weak September jobs report weighs against it. The October CPI comes out November 10.
