Delayed inflation report expected to show US prices ticked up last month

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WASHINGTON (AP) — Friday’s inflation report is likely to show that consumer prices worsened in September for the second straight month as President Donald Trump’s tariffs have lifted the cost of some groceries and other goods.

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The report on the consumer price index is being issued more than a week late because of the government shutdown, now in its fourth week. The Trump administration recalled some Labor Department employees to produce the figures because they are used to set the annual cost-of-living adjustment for roughly 70 million Social Security recipients.

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Friday’s inflation report will be the first comprehensive economic data to be released in more than three weeks and will attract intense interest from Wall Street and officials at the Federal Reserve. Fed officials are cutting their short-term interest rate to buoy the economy and hiring, but they are taking some risk doing so because inflation is still above their 2% target.

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The issues of affordability and the cost of necessities are gaining in political importance. Concerns over the costs of rent and groceries have played a key role in the mayoral race in New York City. And Trump, who has acknowledged that the spike in grocery prices under President Joe Biden helped him win the 2024 election, has been considering importing Argentine beef to reduce record-high U.S. beef prices, angering U.S. cattle ranchers.

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The cost of ground beef has jumped to $6.32 a pound, a record, in part because of tariffs on imports from countries such as Brazil, which faces a 50% duty. Years of drought that have reduced cattle herds have also raised prices.

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Friday’s report is forecast to show that inflation rose 3.1% in September from a year earlier, according to a survey of economists by data provider FactSet. That would be up from 2.9% in August and the highest in 18 months. On a monthly basis, inflation is projected to be 0.4% in September, the same as in August.

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Excluding the volatile food and energy categories, core inflation in September was likely 3.1% for the third straight month. On a monthly basis, core prices likely rose 0.3%, economists project, also for the third straight month.

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Such figures are unlikely to deter the Fed from cutting its key rate by another quarter-point when it meets next week, to about 3.9%. It would be the second cut this year and is driven by Fed Chair Jerome Powell’s concerns that hiring is weakening and poses a threat to the economy.

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Even as inflation has fallen sharply from its peak of 9.1% more than three years ago, it remains a major concern for consumers. About half of all Americans say the cost of groceries is a “major” source of stress, according to an August poll by The Associated Press-NORC Center for Public Affairs Research.

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And the Conference Board, a business research group, finds that consumers are still referencing prices and inflation in responses to its monthly survey on consumer confidence.

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Still, inflation has not risen as much as many economists feared when Trump first announced a sweeping set of tariffs. Many importers built up inventories of goods before the duties took effect, while Trump reduced many import taxes, including as part of trade deals with China, the United Kingdom, and Vietnam.