Inflation Cools in September, Raising Hopes for Further Rate Cuts
WASHINGTON – Consumer prices rose 3.0% in September compared to a year ago, according to the U.S. Bureau of Labour Statistics (BLS), a slightly smaller increase than economists had predicted. The monthly increase was 0.3%, a slight deceleration from the 0.4% inflation reported in August.
The unexpectedly moderate inflation data strengthens expectations that the Federal Reserve may lower interest rates by another quarter percentage point at it’s upcoming policy meeting. This would mark the second consecutive cut as the central bank seeks to balance controlling inflation with supporting economic growth. However, the Fed’s decision-making is complex by the ongoing government shutdown, which has halted the release of most key economic data.
the September inflation report was released thanks to a core team of BLS employees recalled to duty specifically to calculate the cost-of-living adjustment (COLA) for Social Security recipients. Approximately 75 million Americans will see their Social Security payments increase by 2.8% in january,translating to an average increase of about $56 per month.
This year’s COLA increase is higher than the 2.5% adjustment received in 2024, but remains below the 3.1% average increase over the past decade, according to the Social Security Governance (SSA). The data used in the report reflects price checks conducted throughout September, with imported goods continuing to face upward pressure from tariffs, while housing costs have shown some moderation.
The release of this critical economic data is occurring amidst a broader suspension of government economic reports due to the ongoing government shutdown. Most BLS reports remain on hold until funding is restored, hindering a complete assessment of the nation’s economic health.
