Inflation worsened last month to 3.7% in sign that prices remain elevated as midterm elections near

U.S. inflation worsened last month, rising 3.7% in September from a year earlier, up from 3.4% in August, according to Labor Department data released Wednesday. On a monthly basis, the consumer price index jumped 0.6% from August to September, the largest increase in five months. The report marks the last major inflation snapshot before the midterm elections, where affordability has been a central issue.

Gasoline prices surged 9.1% in a single month, pushing up related costs such as airfares, which rose 1.2% in September and are up 22% from a year ago. Hotel prices also climbed 2% for the month. The figures reflect the lingering impact of the Iran war on energy costs, though price increases have spread beyond fuel. Surging investment in data centers and artificial intelligence has also driven up prices for computer chips and consumer electronics.

Excluding volatile food and energy categories, core inflation rose 2.6% annually in September, up from 2.4% the prior month and higher than economists expected. Monthly core prices increased 0.3%, a pace that would exceed the Federal Reserve's 2% target if sustained. Price gains were broad-based, affecting durable goods, nondurables, and services, including toys, new and used cars, sporting goods, and shoes.

Grocery prices offered limited relief, declining 0.1% in September and rising just 1.8% over the past year. Ground beef fell 0.8% for the month but remains 5.4% higher than a year ago. The widespread price pressure increases the likelihood the Federal Reserve will raise its key interest rate at its next meeting on Oct. 27-28. Fed Chairman Kevin Warsh said last month that inflation is not returning to target quickly enough, prompting the central bank to hike rates for the first time in three years to about 3.9%.

The inflation data poses political challenges for Republicans in Congress and the Trump administration. An Associated Press-NORC poll found only 17% of U.S. adults approve of the president's handling of the cost of living, while just 26% approve of his overall economic management, a new low. Rising gas costs, a highly visible sign of inflation, continue to weigh on consumer sentiment.

Sources: Las Vegas Review-Journal