President Donald Trump suffered a second inflation setback in as many days Thursday after a key economic indicator recorded its largest monthly increase in more than four years.
The Producer Price Index rose 1.3 percent in September, accelerating from 0.5 percent in August and 0.2 percent in July, the Bureau of Labor Statistics said. It was the largest monthly increase since March 2022. Producer prices were also 6.3 percent higher than a year earlier, the fastest annual increase since December 2022.
The report followed Wednesday’s Consumer Price Index, which showed prices paid by consumers increasing 0.6 percent during September and 3.7 percent from a year earlier.
Why It Matters
Taken together, the reports show that inflationary pressure is reaching businesses and households. That could create a difficult political message for Trump and congressional Republicans less than three weeks before the November 3 midterm elections.
“These two reports together are a warning that inflation is still working its way through the economy,” Michael Ryan, a finance expert, told Newsweek. “Consumers are already feeling it. And businesses are facing cost pressures that could mean more price increases ahead.”
The economy and cost of living are dominating voters’ concerns. A Pew Research Center survey found that 84 percent of registered voters considered the economy very important to their vote. An AP-NORC survey similarly found that 85 percent viewed the economy as one of the election’s most important issues, while 64 percent disapproved of Trump’s overall job performance.
What the Numbers Show
The September increase was heavily influenced by energy, but it was not limited to that category. Prices for final-demand goods jumped 2.6 percent, the largest increase since the series began in December 2009. More than 80 percent of that rise came from energy prices, which increased 10.8 percent.
The report’s measure excluding food, energy, and trade services rose 0.5 percent in September and 5 percent year-over-year, indicating the jump was not solely defined by energy.
What It Means for Consumers
The reports show inflation is affecting consumers now while higher costs continue to move through production and distribution networks. Wednesday’s CPI release found that energy prices rose 5.2 percent in September and were 20.4 percent higher than a year earlier. Gasoline prices increased 9.1 percent for the month.
The PPI showed even greater pressure earlier in the supply chain. Producer energy prices jumped 10.8 percent, gasoline increased 20.3 percent, and diesel fuel, jet fuel, residential electricity, and crude oil also rose.
“This report is saying what many economists suggested would happen once the tariff regime began,” Kevin Thompson, CEO of 9i Capital Group, told Newsweek. “Although gasoline accounted for approximately half of the increase in goods prices, other parts of the economy, such as services and warehousing, are also seeing price increases.”
Sectors Hit Hardest
Gasoline and diesel were the largest drivers in both reports. Producer prices for transportation and warehousing services increased 3.4 percent. Producer food prices rose 1.2 percent even as consumer food prices were unchanged for the month.
Residential electricity, jet fuel, airline passenger services, and traveler accommodations all registered producer-price increases. One notable exception was eggs: Producer prices for chicken eggs plunged 39.7 percent in September.
What Happens Next
The September reports will likely intensify scrutiny of Trump’s economic record through the final weeks of the midterm campaign. The risk is that voters will judge the economy less by overall growth and more by the actual prices they encounter at gas stations and grocery stores.
“Trump campaigned on lowering prices and taming inflation, but the economy is seeing quite the opposite at this time,” Thompson said.
The Bottom Line
US inflation surged in September, with producer prices rising 1.3 percent — the largest monthly increase in over four years — and consumer prices climbing 3.7 percent year-over-year. The double blow comes less than three weeks before the midterm elections, with voters overwhelmingly citing the economy and cost of living as their top concerns. Energy costs drove much of the increase, but underlying inflation pressures extend beyond gasoline. Trump’s approval on inflation stands at just 22 percent.
My Opinion
Trump campaigned on lowering prices. He promised Americans that inflation would be tamed, that gas would be cheap, that groceries would be affordable. Instead, three weeks before the midterms, producer prices just posted their largest monthly increase in four years. Consumer prices are up 3.7 percent. Gasoline is up 9.1 percent in a single month. And only 22 percent of Americans approve of how he is handling inflation.
The White House will blame energy costs and the war with Iran. But the war is Trump’s war. The tariffs are Trump’s tariffs. The policies that drove up prices are Trump’s policies. He owns this economy, and he owns these numbers.
What makes this worse is that the pain is not abstract. It is at the gas pump. It is at the grocery store. It is in the delivery fees and the airline tickets and the electricity bills. Voters feel it every day. And when they go to the polls on November 3, they will remember.
The Republicans who tied themselves to Trump will pay the price. The candidates who defended his tariffs will be asked why their constituents are paying more. And Trump, the man who once said “I love the inflation,” will discover that American voters do not.
