October 25, 2025

Hold on, folks! US inflation is still sizzling at 3% in September compared to last year, according to the Labor Department’s latest report. That’s slightly higher than August’s 2.9%. But wait, the core inflation, which leaves out the more jumpy food and energy prices, actually fell a bit to 3% from 3.1%. Both numbers are above the Federal Reserve’s sweet spot of 2%. This inflation news came later than usual because the government shutdown slowed everything down. Some Labor Department workers zoomed back to action just to get these numbers ready since about 70 million Social Security folks depend on this data to adjust their benefits. Economists expected a rougher hike, but this smaller rise might push the Federal Reserve to cut interest rates again, probably by a quarter point, when they meet next week. It would be their second cut this year, aiming to boost jobs and economy despite some risk because inflation is still above target. So, what’s pushing prices up? President Donald Trump’s tariffs play a big role. Tariffs on countries like Brazil have made beef and groceries costlier. Beef prices hit a whopping $6.32 a pound recently, a fresh record, thanks to tariffs and drought shrinking cattle numbers. Trump even thinks of bringing beef from Argentina to cool down prices, though US ranchers are not happy about it. Inflation rose 0.4% in September month-on-month, steady with August. Core prices likely climbed 0.3% that month for the third straight time. These steady rises show inflation isn’t giving up. While inflation dropped from the scary peak of 9.1% a few years ago, it’s still a pain for many. Half of Americans say grocery prices stress them out a lot! Consumer confidence surveys also show prices remain a hot topic. However, tariffs didn’t skyrocket prices as much as many feared. Importers stocked up before tariffs began, and some tariffs were lowered thanks to trade deals with China, UK, and Vietnam. Economists believe tariffs cause a one-time price jump that should calm down early next year. Rent prices are cooling nationwide, which softens inflation a bit. But Trump’s continuing tariffs could keep prices high for longer. For example, the US might slap 100% tariffs on Nicaragua over alleged human rights issues. This worries Dan Rattigan, co-founder of French Broad chocolates. His company relies on cocoa from Nicaragua, Dominican Republic, and Uganda, but Nicaragua’s imports now face an 18% tax. Cocoa prices already doubled because of bad weather in West Africa. Plus, tariffs hit other chocolate ingredients and equipment from Italy, raising costs further. French Broad raised prices slightly earlier this year and may raise them again after the holidays, as Dan says, "all bets are off ... in what is a very unpredictable business climate." It’s clear: US inflation is a spicy mix of tariffs, supply issues, and economic decisions. We’re watching how the Fed rolls the dice next week to keep the economy cooking just right!

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Tags: Us inflation, Consumer prices, Federal reserve, Tariffs, Trump administration, Cost of living,