US inflation hits 3.7% as gasoline jumps 34.2%; IMF sees 2026 growth at 3.1%
US consumer prices rose 3.7% in the year to September, retail sales gained 0.8% in the month and China's factory-gate prices climbed 5.0%, according to official data.
- US consumer prices rose 3.7% in the 12 months to September, with core at 2.6%, according to the Bureau of Labor Statistics.
- The IMF set its 2026 world growth forecast at 3.1% on Oct. 13, up 0.1 percentage point from July.
- The Federal Reserve decides on rates on Oct. 28 after raising its target range to 3.75%-4.00% in September.
US consumer prices rose 3.7% in the 12 months to September as gasoline climbed 34.2%, the Bureau of Labor Statistics said on Oct. 14, as the IMF raised its 2026 global growth forecast to 3.1%.
Gasoline lifts US inflation to 3.7% while core prices rise 2.6%
The Bureau of Labor Statistics said the consumer price index rose 0.6% in September on a seasonally adjusted basis. The 12-month rate was 3.7%, up from 3.4% in August.
Energy prices rose 5.2% in the month and 20.4% in the year. Gasoline rose 9.1% in the month and 34.2% from a year earlier, which makes fuel the main driver of the headline rate.
Core prices, which exclude food and energy, rose 0.3% in the month and 2.6% in the year. Shelter rose 0.4% in the month, and food prices were unchanged in the month.
The acceleration in the headline rate is 0.3 percentage points, our calculation: 3.7 - 3.4. Core inflation runs 0.6 percentage points above the Fed's 2% goal, our calculation: 2.6 - 2.
The Fed raised rates in September and its minutes point to a further increase
The Federal Open Market Committee raised the federal funds target range by 0.25 percentage point to 3.75%-4.00% on Sept. 16, in a 12-0 vote, the Fed said in its statement.
The committee said inflation remains high and that the action will support a timelier return to its 2% goal.
Minutes released Oct. 7 show that most participants judged another increase in the target range would likely be appropriate. All participants viewed the September increase as appropriate, according to the Fed.
Futures priced an 87% chance of no change at the Oct. 28 meeting, according to CME FedWatch figures cited by BNN Bloomberg on Oct. 16.
That is market pricing, not a Fed commitment.
US retail sales rise 0.8% in September to $745.0 billion
The Census Bureau said on Oct. 15 that retail and food services sales were $745.0 billion in September. That is up 0.8% from August and 6.3% from September 2025.
Sales growth of 6.3% in the year compares with consumer price growth of 3.7%. The gap is 2.6 percentage points, our calculation: 6.3 - 3.7, a nominal comparison that does not adjust for price differences across categories.
The IMF lifts 2026 global growth to 3.1% as China's factory prices rise 5.0%
The IMF raised its 2026 global growth forecast by 0.1 percentage point to 3.1% in the World Economic Outlook released Oct. 13, according to Trading Economics. Growth of 3.4% is projected for 2027, CGTN reported.
IMF Managing Director Kristalina Georgieva said on Oct. 12 that accelerating investment in AI infrastructure was a key factor keeping growth near 3%, according to CGTN.
China's National Bureau of Statistics said on Oct. 15 that producer prices rose 5.0% year on year in September, and monthly producer prices rose 1.2%. Consumer prices rose 0.9% year on year, with core prices up 1.0%.
The gap between factory-gate and consumer inflation in China is 4.1 percentage points, our calculation: 5.0 - 0.9. The September producer price rate compares with 3.8% in August, CGTN reported.
The European Central Bank raised rates on Sept. 10
The European Central Bank raised its key interest rates by 25 basis points on Sept. 10. Its staff project headline inflation of 3.0% for 2026, 2.5% for 2027 and 2.1% for 2028.
The ECB said the risks to the inflation outlook are to the upside. The US figure of 3.7% compares with the ECB's 3.0% staff projection for the euro area, though the two measures cover different periods.
The week in numbers
| Indicator | Latest | Change measure | Source |
|---|---|---|---|
| US consumer prices, Sept. (year on year) | 3.7% | +0.6% month on month | BLS |
| US core consumer prices, Sept. (year on year) | 2.6% | +0.3% month on month | BLS |
| US retail and food services sales, Sept. | $745.0 billion | +0.8% month on month | Census Bureau |
| Fed funds target range | 3.75%-4.00% | +0.25 percentage point on Sept. 16 | Federal Reserve |
| China consumer prices, Sept. (year on year) | 0.9% | +0.2% month on month | NBS China |
| China producer prices, Sept. (year on year) | 5.0% | +1.2% month on month | NBS China |
| IMF world growth forecast, 2026 | 3.1% | +0.1 percentage point vs July | Trading Economics |
As of Oct. 18. Changes are as published by each source; the percentage-point gaps in the text are our calculation.
Chinese activity data, UK inflation and flash PMIs fill the days to Oct. 23
- Oct. 19: China publishes third-quarter GDP and September activity data, according to LiteFinance.
- Oct. 20: China's loan prime rate is due, with the one-year rate at 3.00%, Newsquawk said in its preview.
- Oct. 21: UK September inflation is due; Newsquawk lists consensus at 3.4% year on year, against 3.1% before.
- Oct. 23: flash October PMIs for the euro area, the UK and the US.
- Oct. 28: the Fed announces its decision at 2:00 p.m. ET, according to the Fed's calendar.
How we reported this: We opened the BLS release, the Fed statement and minutes, the Census, NBS and ECB pages. Percentage-point gaps are our calculation from those figures. The IMF figures rest on two media reports.
Source: www.bls.gov