September 2025 CPI Shows 3.0% Annual Inflation Amid Federal Shutdown

The U.S. Bureau of Labor Statistics (BLS) released the Consumer Price Index (CPI) data for September 2025 on October 24, 2025, at 8:30 a.m. Eastern Time. This release was delayed from its original date of October 15 due to an ongoing federal government shutdown. (bls.gov)

The CPI report indicates that consumer prices increased by 0.3% in September on a seasonally adjusted basis, down from a 0.4% rise in August. Year-over-year, the all-items index rose by 3.0%, up from 2.9% in August, marking the highest annual increase since January 2025.

The primary drivers of this inflation were a 4.1% increase in gasoline prices and a 0.5% rise in shelter costs. Notably, rent costs rose at their slowest annual pace in nearly four years. Additionally, tariffs have contributed approximately 0.4 percentage points to overall inflation, particularly affecting goods like furniture, appliances, and clothing.

The delayed release of the CPI data was prioritized to allow the Social Security Administration to meet statutory deadlines necessary for calculating the 2026 cost-of-living adjustment (COLA) for Social Security and Supplemental Security Income benefits. (bls.gov)

Due to the government shutdown, no other economic data releases are expected until regular government services resume. (bls.gov)

Economists express concern that the ongoing shutdown, combined with budget and staffing constraints, could compromise the quality and timeliness of future economic data, including the October CPI report.

Despite the inflationary pressures, the Federal Reserve is expected to proceed with a 25 basis point interest rate cut to support economic growth. Businesses have absorbed some of the tariff costs, often at the expense of hiring, but are now facing rising operational costs as inventories deplete and restocking occurs at higher post-tariff prices.

The timely release of the CPI data was crucial for the Social Security Administration to calculate the 2026 COLA, ensuring that benefits keep pace with inflation. Rising prices, especially in essential categories like energy and shelter, may strain household budgets, particularly for lower-income families. Companies facing increased costs due to tariffs and rising prices may adjust their pricing strategies, potentially leading to higher consumer prices and impacting demand.

The current annual inflation rate of 3.0% is the highest since January 2025, indicating a persistent upward trend in consumer prices. The combination of tariff impacts and government shutdowns presents a unique challenge not seen in recent years.

The delayed release of the September 2025 CPI data underscores the intricate interplay between government operations, economic indicators, and policy decisions. As inflation reaches its highest annual increase since January 2025, stakeholders across the spectrum must navigate the challenges posed by both market forces and administrative disruptions.