Special Report · Cost of Living · Published September 30, 2026, 8:17 PM CDT · Updated September 30, 2026, 8:40 PM CDT
Prices rose 3.4% over the past year, gasoline is up more than 27%, and paychecks are buying less than they did a year ago.[1][2]
This report uses the government’s own numbers and the words of the officials and business contacts who are on the record. Every figure and quote links to its source.
The Numbers
The Consumer Price Index rose 0.4% in August, after 0.1% in July. Gasoline rose 3.9% in the month and accounted for over a third of the increase.[1]
| Measure | Change from a year earlier |
|---|---|
| All items (CPI) | 3.4%[1] |
| Gasoline | 27.4%[1] |
| Energy | 16.3%[1] |
| Electricity | 3.8%[1] |
| Shelter (rent and housing costs) | 3.0%[1] |
| Food | 2.7%[1] |
| Food at home (groceries) | 2.2%[1] |
| Core CPI (without food and energy) | 2.4%[1] |
| Real average hourly earnings | −0.3%[2] |
The Fed’s preferred gauge, the PCE price index, is up 3.4% over the year. Without food and energy it is up 3.0%.[3]
The trend matters as much as the level. Inflation was 2.4% in January and 2.4% in February. It climbed to 3.3% in March, 3.8% in April and a peak of 4.2% in May. It has settled at 3.4%.[7]
Underneath, most prices are cooling. A year ago, in August 2025, groceries were up 2.7%, shelter 3.6% and electricity 6.2%. Now they are up 2.2%, 3.0% and 3.8%. Core inflation fell from 3.1% to 2.4% over the same year.[1][7]
View the data as a table
| Month | All items | Core |
|---|---|---|
| Jan 2025 | 3.0% | 3.3% |
| Feb 2025 | 2.8% | 3.1% |
| Mar 2025 | 2.4% | 2.8% |
| Apr 2025 | 2.3% | 2.8% |
| May 2025 | 2.4% | 2.8% |
| Jun 2025 | 2.7% | 2.9% |
| Jul 2025 | 2.7% | 3.1% |
| Aug 2025 | 2.9% | 3.1% |
| Sep 2025 | 3.0% | 3.0% |
| Oct 2025 | no data | no data |
| Nov 2025 | 2.7% | 2.6% |
| Dec 2025 | 2.7% | 2.6% |
| Jan 2026 | 2.4% | 2.5% |
| Feb 2026 | 2.4% | 2.5% |
| Mar 2026 | 3.3% | 2.6% |
| Apr 2026 | 3.8% | 2.8% |
| May 2026 | 4.2% | 2.9% |
| Jun 2026 | 3.5% | 2.6% |
| Jul 2026 | 3.4% | 2.5% |
| Aug 2026 | 3.4% | 2.4% |
Core leaves out food and energy, and energy is where prices have jumped. Core is running at 2.4% while the headline rate is 3.4%. Over the past year energy is up 16.3% and gasoline 27.4%, and gasoline accounted for over a third of August’s monthly increase.[1]
Gas Is the Pressure Point
AAA put the national average at $4.48 a gallon on September 24, up nearly 5 cents from the week before.[4]
“Typically, the start of autumn brings lower gas prices, but lingering volatility in the Strait of Hormuz and the high cost of crude oil are driving up pump prices.”
— AAA, September 24[4]
The federal data shows how sharp the turn was. Gasoline prices were falling from a year earlier through the winter: −7.5% in January and −5.6% in February. In March they were +18.9%, in April +28.4% and in May +40.5%. In August they were still +27.4%, against −6.6% a year ago. That is a 34-point swing in twelve months.[1][7]
View the data as a table
| Month | Gasoline, change vs. a year earlier |
|---|---|
| Jan 2025 | −0.2% |
| Feb 2025 | −3.1% |
| Mar 2025 | −9.8% |
| Apr 2025 | −11.8% |
| May 2025 | −12.0% |
| Jun 2025 | −8.3% |
| Jul 2025 | −9.5% |
| Aug 2025 | −6.6% |
| Sep 2025 | −0.5% |
| Oct 2025 | −1.7% |
| Nov 2025 | +0.9% |
| Dec 2025 | −3.4% |
| Jan 2026 | −7.5% |
| Feb 2026 | −5.6% |
| Mar 2026 | +18.9% |
| Apr 2026 | +28.4% |
| May 2026 | +40.5% |
| Jun 2026 | +26.7% |
| Jul 2026 | +24.6% |
| Aug 2026 | +27.4% |
Paychecks Fell Behind
Hourly pay is still rising, but more slowly than prices. Pay growth was 3.7% in February, 1.3 points ahead of inflation. By March the lead was down to 0.1 point. Since April, pay has trailed prices every month.[7]
The widest gap came in May, when pay growth of 3.3% met inflation of 4.2%, a shortfall of 0.9 points. In August it was 0.3 points, which matches the official figure: after adjusting for inflation, average hourly earnings are down 0.3% over the past year.[2][7]
View the data as a table
| Month | Pay growth | Inflation | Gap (points) |
|---|---|---|---|
| Jan 2025 | 4.0% | 3.0% | +1.0 |
| Feb 2025 | 4.1% | 2.8% | +1.3 |
| Mar 2025 | 4.2% | 2.4% | +1.8 |
| Apr 2025 | 3.9% | 2.3% | +1.6 |
| May 2025 | 4.0% | 2.4% | +1.6 |
| Jun 2025 | 3.9% | 2.7% | +1.2 |
| Jul 2025 | 4.0% | 2.7% | +1.3 |
| Aug 2025 | 4.0% | 2.9% | +1.1 |
| Sep 2025 | 3.8% | 3.0% | +0.8 |
| Nov 2025 | 3.9% | 2.7% | +1.2 |
| Dec 2025 | 3.7% | 2.7% | +1.0 |
| Jan 2026 | 3.7% | 2.4% | +1.3 |
| Feb 2026 | 3.7% | 2.4% | +1.3 |
| Mar 2026 | 3.4% | 3.3% | +0.1 |
| Apr 2026 | 3.6% | 3.8% | −0.2 |
| May 2026 | 3.3% | 4.2% | −0.9 |
| Jun 2026 | 3.4% | 3.5% | −0.1 |
| Jul 2026 | 3.2% | 3.4% | −0.2 |
| Aug 2026 | 3.1% | 3.4% | −0.3 |
What the Fed Says
On September 16 the Federal Reserve raised its benchmark rate a quarter point, to 3¼–4%. The committee’s vote was unanimous. The Fed’s median projection has inflation running at 3.7% this year and 2.3% next year.[5]
“The plain fact is that inflation is too high and has been for too long.”
— Kevin Warsh, Fed Chair, September 16[5]
A CBS reporter pointed out that a rate hike does not reopen the Strait of Hormuz. Warsh did not claim it would.[5]
“We cannot affect any individual price, whether it be oil prices, whether it be foodstuffs at the grocery store.”
— Kevin Warsh, Fed Chair, September 16[5]
What Households and Businesses Told the Fed
The Fed’s Beige Book, published September 2, collects reports from businesses and community groups in each region. These are not named individuals, but they are the closest primary record of how people are coping.[6]
New York district. A moderately priced restaurant reported that guests were trading down from pricier places, “with some single diners noting it’s now cheaper to eat out than to purchase groceries for home-cooked meals.” Auto dealers said consumers “postponed purchases and repaired existing vehicles to extend their useful life.”[6]
Atlanta district. The report says: “Financial strain among low- and moderate-income populations worsened over the summer as higher living expenses compounded existing affordability challenges.” Community contacts said many families “have increasingly relied on debt—including credit cards, payday loans, and ‘buy now, pay later’ services to cover essential expenses.”[6]
Boston district. Many contacts “cited high energy costs as a strain on consumer budgets” and worried about the home heating season if the conflict in the Middle East continues.[6]
What Lawmakers Say
Both parties agree prices are too high. They disagree on why, and on what is working. Both statements below were issued September 30, the day the August PCE data came out.
“Prices today remain too high, and families are still feeling the pain — but core inflation today is less than half of what it was at its peak in 2022.”
— Rep. Jason Smith (R-MO), Chairman, House Ways and Means Committee[8]
“Today’s report confirms that costs are still too high under President Trump. While Trump builds himself a gilded ballroom, his Iran war, his tariff taxes, and his health care cuts have made life in America even more expensive for working families.”
— Rep. Brendan Boyle (D-PA), Ranking Member, House Budget Committee[9]
Why It Matters
Spending is outrunning income. In August, consumer spending rose 0.9% while disposable income rose 0.3%, and the personal saving rate stands at 4.1%.[3]
Put together, the data and the testimony agree: core inflation is easing, but gasoline pushed the headline rate back up in the spring, pay has trailed prices since April, and households are leaning on credit to cover basics. The central bank has chosen to raise rates, which raises borrowing costs for households already leaning on credit.
References
- U.S. Bureau of Labor Statistics. Consumer Price Index, August 2026 (released September 11, 2026).
- U.S. Bureau of Labor Statistics. Real Earnings, August 2026.
- U.S. Bureau of Economic Analysis. Personal Income and Outlays, August 2026 (released September 30, 2026).
- AAA Newsroom. National Average Climbs Nearly 5 Cents Since Last Week (September 24, 2026).
- Federal Reserve. Transcript of Chairman Warsh’s Press Conference, September 16, 2026.
- Federal Reserve System. The Beige Book, August 2026 (released September 2, 2026).
- U.S. Bureau of Labor Statistics. Public Data API: CPI-U all items (CUUR0000SA0), core (CUUR0000SA0L1E), gasoline (CUUR0000SETB01) and average hourly earnings (CES0500000003). Monthly series pulled September 30, 2026.
- House Committee on Ways and Means. Chairman Smith on PCE, GDP Reports (September 30, 2026).
- House Budget Committee Democrats. Boyle Statement on August 2026 PCE Inflation Data (September 30, 2026).
Methodology: figures are quoted from the linked government releases. The charts use monthly series from the BLS Public Data API (not seasonally adjusted, so they match the 12-month changes BLS reports); the pay-gap chart subtracts CPI-U inflation from average hourly earnings growth for all private employees. BLS has no October 2025 CPI, so that month is blank. Quotes are verbatim from the cited documents. Statements from lawmakers are those posted on their official sites on September 30, 2026; a quote attributed to a White House official was left out because the original page could not be retrieved.
Kemetic Minds Editorial Desk
Verified NewsroomPrimary-sourced investigative intelligence on civil rights, voting rights, federal policy, and consumer protection. Sourced from primary legal filings, government statistics, and direct field reporting.