America’s inflation is back at 3%. That’s higher than normal but not out of control

By Alicia Wallace, CNN

(CNN) — The cost of living got even more expensive for Americans last month, with prices rising at the fastest pace since the start of the year.

Consumer prices rose 0.3% in September, which drove the annual rate of inflation from 2.9% to 3%, the highest it’s been since January, according to Bureau of Labor Statistics data released Friday. Gas prices, which shot up 4.2% for regular unleaded fuel (their highest monthly gain since August 2023), were the biggest culprit behind the monthly increase, BLS data shows.

Plus, food prices rose at a more moderate pace than they did in August (a month when grocery prices leapt by the highest rate in nearly three years).

Economists were expecting that inflation would continue to pick up speed, rising 0.4% for the month and 3.1% from the year before, according to FactSet estimates.

Excluding food and energy, which can be quite volatile, core CPI rose 0.2% in September, with an annual inflation rate settling out at 3%.

Although better than economists had expected, Friday’s inflation data is a disconcerting reminder that prices are still rising faster than they typically should.

Due to inflation, the typical American household is spending $208 more a month in September to purchase the same goods and services as they were a year ago, and $1,043 more a month than they did at the start of 2021, coming out of the pandemic, new data from Moody’s Analytics showed.

However, the September report is somewhat unique in its own right: It’s the first major federal economic report released since the US government shut down on October 1.

September CPI, which was originally scheduled for release on October 15, is being belatedly published so that the government can meet deadlines to make cost of living adjustments for 2026 Social Security payments.

Stock futures jumped higher after the data release, on hopes that the Federal Reserve can stay on track with its rate-cutting plans. Dow futures were up 268 points, or 0.57%. S&P 500 futures rose 0.7%. Nasdaq 100 futures gained 1%.

This story is developing and will be updated.

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CNN’s Matt Egan contributed to this report.