The U.S. Bureau of Labor Statistics revealed that the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.3% on a seasonally adjusted basis in September following a 0.4 % increase in August. Prior to seasonal adjustment, the all-items index rose 3.0% over the previous 12 months. Keep in mind that the September CPI data collection was finished prior to the appropriations lapse.
While the energy index increased by 1.5% throughout the month, the gasoline index increased by 4.1% in September, making it the highest contributor to the monthly increase for all products. While the food at home index increased by 0.3% and the food away from home index increased by 0.1% throughout the month, the food index increased by 0.2%.
Following increases of 0.3% in the two months prior, the index for all items excluding food and energy increased by 0.2% in September. The following indexes had increases during the month: lodging, airfare, leisure, home furnishings and operations, and clothing. Among the few significant indexes that saw declines in September were those for communication, used automobiles and trucks, and auto insurance.
After increasing 2.9% for the 12 months ending in August, the all-items index increased 3.0% for the 12 months ending in September. Over the past 12 months, the all-items-less-food and energy index has likewise increased by 3.0%. The 12-month period ending in September saw a 2.8% increase in the energy index. Over the past year, the food index rose 3.1%.
“Inflation edged higher in September, just as the Federal Reserve prepares to lower interest rates again next week in an effort to support a cooling labor market,” said Sam Williamson, Senior Economist at First American. “Despite the uptick, the Fed is still expected to prioritize addressing growing signs of labor market softness over further progress against inflation and cut rates at its meeting next week. However, officials remain divided on how aggressively to ease, making a December cut far from certain and dependent on incoming data.
U.S. Inflation Stirs Up America
After the pandemic, the U.S. inflation rate reached a 40-year high, but it has since sharply decreased as a result of the Federal Reserve’s rate hikes. As of September 2025, the year-over-year inflation rate is 3%, which is still higher than the 2% goal rate. This above-average inflation is caused by a number of variables, including the war in Ukraine, labor shortages, and recent tariffs. The Federal Reserve lowered interest rates by a quarter percentage point in September 2025, the first since December 2024, even though the nation hasn’t yet reached its goal.
However, inflation rates vary throughout the United States. WalletHub evaluated 23 major MSAs (Metropolitan Statistical Areas) across two important metrics connected to the Consumer Price Index, which tracks inflation, to ascertain how people are affected by inflation in various regions of the nation. To obtain an overview of the short- and long-term changes in inflation, we compared the Consumer Price Index for the most recent month for which BLS data is available to two months and a year earlier.
“Today’s CPI release brings a bit of relief for home buyers. The 10-year Treasury yield slipped below 4% following today, a shift that could help pull mortgage rates lower,” Williamson said. “The average 30-year, fixed rate now sits around 6.2%—the lowest since last September. A drop below 6.1% would mark the most affordable level since September 2022, when rates were surging.”
Cities With the Biggest Inflation Problems
| Overall Rank | MSA | Total Score | Consumer Price Index Change (Latest month vs 2 months before) | Consumer Price Index Change (Latest month vs 1 year ago) |
|---|---|---|---|---|
| 1 | Denver-Aurora-Lakewood, CO | 87.50 | 1.00% | 3.10% |
| 2 | Los Angeles-Long Beach-Anaheim, CA | 81.25 | 0.70% | 3.50% |
| 3 | Chicago-Naperville-Elgin, IL-IN-WI | 80.21 | 0.90% | 2.90% |
| 4 | Boston-Cambridge-Newton, MA-NH | 78.13 | 0.70% | 3.30% |
| 5 | Minneapolis-St.Paul-Bloomington, MN-WI | 71.35 | 0.80% | 2.60% |
| 6 | Washington-Arlington-Alexandria, DC-VA-MD-WV | 69.79 | 0.80% | 2.50% |
| 6 | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 69.79 | 0.50% | 3.30% |
| 8 | Anchorage, AK | 68.23 | 0.80% | 2.40% |
| 9 | New York-Newark-Jersey City, NY-NJ-PA | 65.10 | 0.50% | 3.00% |
| 10 | San Diego-Carlsbad, CA | 62.50 | 0.10% | 3.90% |
“The Consumer Price Index rose 0.3% month-over-month and 3.0% year-over-year—the fastest annual pace since January,” Williamson continued. “Core inflation, which excludes food and energy and is closely watched by the Fed, increased 0.2% on the month and also 3.0% annually.”
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