According to consumer price index data released Thursday by the Bureau of Labor Statistics, the price of goods and services increased by 3.7% in the 12-month period ending in September. Increases in the cost of shelter and food largely drove the increase.
The prices of goods and services increased 0.4% in September alone, the Bureau of Labor Statistics said. Previously, a 0.6% increase in August marked the highest one-month increase in the consumer price index since June 2022.
The new data will help the Social Security Administration decide how much beneficiaries will get in their yearly cost-of-living adjustment.
Shelter costs rose 7.2% in the last year, while food increased 3.7%. The data noted, however, that the price of food purchased at grocery stores increased a mere 2.4% while food away from home increased 6%.
Energy costs remain slightly cheaper than a year ago, as overall Americans are paying 0.5% less than a year ago in energy.
The consumer price index weighs the costs of goods based on their importance. Items like food, shelter and energy tend to be weighted more heavily.
The CPI had gradually fallen from June 2022, when it peaked at 9.1%, its highest rate in nearly four decades. The CPI dropped to a low of 3% in June.
The new data could help the Federal Reserve decide whether to raise interest rates again. The base interest rate currently stands at a 22-year high of 5.25%-5.5%.
The Federal Reserve meets Nov. 1 to decide on whether to move interest rates.
Federal Reserve Chair Jerome Powell has said the Fed’s goal is to get the annualized inflation rate to 2%.
The Bureau of Labor Statistics said that average hourly earnings have increased 4.2% in the 12-month period ending in September. There also remains an uptick in hiring even with high interest rates. High interest rates are meant to cool inflation but generally also cause employment to take a downturn.