High gasoline prices expected to boost US consumer inflation in September

Consumer prices in the United States are expected to climb in September, primarily due to higher gasoline and food costs, according to Reuters. This trend is set to add to a series of setbacks for President Donald Trump and his Republican Party as they head into the crucial November midterm elections. Consumer sentiment has declined, and Trump's approval rating has dropped as Americans grapple with the rising cost of living.

A recent Reuters/Ipsos poll found that 78% of respondents blamed Trump's policies, including tariffs and the US-Israeli conflict with Iran, for the price hikes. The Consumer Price Index report is anticipated to show a moderate increase in prices outside of volatile energy and food sectors, potentially reducing pressure for the Federal Reserve to raise interest rates again in October.

Economists believe the moderation in core CPI inflation may not provide much relief to consumers, especially those at the bottom of the "K-shaped economy" – those facing higher energy and food prices. Analysts predict the CPI rose by 0.6% in September, up from 0.4% in August, with gasoline prices increasing by 7.1%. Food prices are forecast to rise by at least 0.2%, following two straight months of 0.1% gains.

For the year, the CPI is expected to have increased by 3.6%, up from 3.4% in the previous month. The Social Security Administration uses the CPI data to determine annual cost-of-living adjustments for benefits in 2027, potentially raising the average monthly benefit for retirees by $67.90 to $2,007. The energy price shock is being closely monitored to see if it extends beyond the transportation sector.