Oct 24 • Market Updates
10/24
Today’s CPI report summary
US CPI Report Summary - September 2025 (Released October 24, 2025)
The Bureau of Labor Statistics (BLS) released the September CPI data this morning amid a government shutdown, prioritizing it for Social Security cost-of-living adjustments (COLA). Data collection relied more on online surveys, potentially introducing some sampling variability, but the report shows inflation ticking up slightly due to tariff-sensitive goods.
Key Headlines:
- **Headline CPI (All Items)**: Rose 0.4% month-over-month (MoM, seasonally adjusted), matching August's pace. On a 12-month basis, it increased to 3.1% (up 0.2 pp from August's 2.9%).
- **Core CPI (Excluding Food & Energy)**: Up 0.3% MoM (unchanged from August) and 3.1% year-over-year (YoY, flat from prior month).
- **Chained CPI (Broader Measure)**: Increased 0.3% not seasonally adjusted for the month; 2.7% YoY.
Sector Breakdown:
- **Upward Pressures**: Goods prices rose due to pass-through from new tariffs (e.g., imports), with notable gains in apparel (+0.5%) and household furnishings (+0.4%). Gasoline edged up 0.2% amid geopolitical tensions.
- **Downward Pressures**: Services cooled, with airfares (-1.2%) and lodging (-0.5%) declining after August surges. Food prices were flat MoM (+2.4% YoY), while energy overall dipped 0.1%.
- **Shelter (Largest Component)**: +0.3% MoM, contributing over half the headline gain; rent up 0.4% YoY.
Implications:
- Inflation remains "temporarily hot" but aligned with expectations, unlikely to derail the Fed's anticipated 25 bps rate cut at its October 28-29 meeting (98.9% probability per CME FedWatch).
- For 2026 Social Security COLA: Based on Q3 CPI-W data, expect ~2.7% adjustment (up from 2025's 2.5%), benefiting 72.5M+ recipients.
- Broader Context: This caps a summer of accelerated inflation (August's 0.4% MoM was the year's highest), but economists see moderation ahead as tariffs fade and supply chains stabilize. October's report quality may suffer from shutdown disruptions (75%+ data missing in prior shutdowns).
Overall, the data signals persistent but not accelerating price pressures, supporting a soft landing narrative amid economic resilience. Watch for revisions in future releases.
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10/24
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