Prices and inflation continued to grow in September as the cost of rent and some other services shrank, adding to an unclear financial outlook as the United States enters the holiday shopping season.

News Release

WASHINGTON, D.C. — Prices and inflation continued to grow in September as the cost of rent and some other services shrank, adding to an unclear financial outlook as the United States enters the holiday shopping season. Adding to an unclear outlook is the weeks-long government shutdown, which has prevented collection of some data and delayed a Labor Department economic report by over a week.

The Labor Department’s Bureau of Labor Statistics report, issued Friday, Oct. 24, was produced because its figures set cost-of-living adjustments for the country’s 70 million Social Security beneficiaries. Employees with the department, currently furloughed, were recalled by the Trump administration to assemble the report.

Its overall financial picture was mixed: While consumer prices and core prices have risen, with consumer prices increasing 3% in September and and core prices rising 3% year-over-year, the rate of increase has slowed – prices rose 0.3% in September, down from August’s 0.4%. Core inflation, meanwhile, increased 0.2%, 0.01% less than August’s 0.3%.

Federal Reserve officials are relieved by the better-than-anticipated September figures, signaling a key interest rate cut at their next meeting and a possible second cut in December. Inflation remains above the Fed’s target rate of 2%.

In addition, inflation rates continue to climb in other sectors. Gasoline prices rose 4.1% in September alone compared to the previous month, where it was was the main inflationary factor. Food prices have risen by 0.3% since August, up 2.7% year-over-year.

Costs of necessities have becoming increasingly politically important, with New York City’s ongoing mayoral election seeing groceries and rent become a battleground issue. And Trump, who admitted that rising food prices helped win the 2024 election against then-Pres. Joe Biden, is considering importing Argentine beef to lower the record price of U.S. beef – earning the ire of U.S. cattle farmers.

Ground beef has risen $6.32 per pound, a record high. This is due to tariffs on imports from countries such as Brazil, which face a 50% duty. A long-standing drought, in which the number of livestock has decreased, has also increased prices. More than a third of the county’s land is pasture, while most of U.S. crops – 127.4 million of 391.5 million acres – are dedicated to growing livestock feed. In total, 41% of contiguous U.S. land is used for livestock.

The inflation rate has fallen significantly from a peak of 9.1% in 2022, but it is still a major worry for citizens. According to an August poll by the Associated Press-NORC Center for Public Affairs Research, about half of all Americans feel the cost of shopping is a “major” source of stress.

The Conference Board’s monthly consumer confidence survey showed that inflation and prices continue to be referenced by respondents, while consumer confidence declined again in September.

However, inflation has not risen as much as many economists feared when Trump first announced broad tariffs. Many importers have accumulated inventory of goods before tariffs take effect, and Trump has reduced many import taxes as part of trade agreements with China, the United Kingdom and Vietnam.

At the same time, many officials argue that inflation, excluding tariffs, is cooling down. For example, the increase in rental fees is cooling on the national level.

However, Trump continues to set tariffs that could permanently raise prices.

For example, the Trump administration is investigating the appropriateness of imposing a 100% tax on imports from Nicaragua on suspicion of human rights violations.

Since the United States produces little cocoa, many companies import from Nicaragua, the Dominican Republic, and Uganda. Imports from Nicaragua were tax-free because they had a trade agreement with the United States, but they now face an import tax of 18%. Due to years of bad weather and poor harvests in West Africa, which produces more than 70% of the world’s supply of cocoa, the crop’s cost has more than doubled in the past two years. The import duties are a further blow.

Similar materials that cannot be produced in the U.S., either at all or at levels matching demand, also are seeing price increases from tariffs.