This file photo taken on Sept. 15, 2026 shows the gasoline price at a gas station in New York, the United States. U.S. inflation accelerated in September as consumers paid more for gasoline and other energy goods, according to data released by the U.S. Bureau of Economic Analysis (BEA) on Oct. 29, 2026. (Xinhua/Zhang Fengguo)
NEW YORK, Oct. 29 (Xinhua) -- U.S. inflation accelerated in September as consumers paid more for gasoline and other energy goods, according to data released by the U.S. Bureau of Economic Analysis (BEA) on Thursday.
The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.5 percent month on month in September, the largest gain since March. Year on year, PCE inflation climbed to 3.6 percent, the highest since May. Both readings were in line with economists' expectations.
Prices for gasoline and other energy goods surged 9.2 percent from August, as the Iran war and restrictions on shipping through the Strait of Hormuz kept fuel costs elevated. Goods prices rose faster than in August, while services prices increased at a steady pace.
Excluding the volatile food and energy components, the core PCE price index rose 0.3 percent month on month in September, the same pace as a revised reading for August. Core PCE inflation rose 3.1 percent year on year, up from 3 percent.
Inflation has now run above the Fed's 2 percent target for more than five years, and September's data kept it moving further away from that goal.
U.S. consumer spending rose 0.5 percent in September, slowing from August, the BEA said. Adjusted for inflation, spending was unchanged, as higher prices absorbed the gain.
Personal income rose 0.2 percent, slower than in August and short of the increase in prices. With households still spending, the personal saving rate fell to 3.8 percent, the lowest in nearly four years.
The report came a day after the Fed left its benchmark interest rate unchanged at a range of 3.75 percent to 4 percent, while acknowledging that inflation "remains elevated." The decision followed a quarter-point rate hike in September.
Financial markets continued to expect another move this year. Traders were pricing in an over 80 percent chance of a rate hike at the Fed's December meeting, according to CME's FedWatch Tool. ■
This file photo taken on Sept. 4, 2026 shows the gasoline price at a gas station in New York, the United States. U.S. inflation accelerated in September as consumers paid more for gasoline and other energy goods, according to data released by the U.S. Bureau of Economic Analysis (BEA) on Oct. 29, 2026. (Xinhua/Zhang Fengguo)
This file photo taken on Sept. 15, 2026 shows the gasoline price at a gas station in New York, the United States. U.S. inflation accelerated in September as consumers paid more for gasoline and other energy goods, according to data released by the U.S. Bureau of Economic Analysis (BEA) on Oct. 29, 2026. (Xinhua/Zhang Fengguo)