What was the official US inflation rate in September 2025 and how is it measured?
Executive summary
The Bureau of Labor Statistics’ Consumer Price Index (CPI‑U) showed a 0.3% seasonally adjusted rise in September 2025 and a 12‑month (year‑over‑year) CPI increase reported around 3.0% (headline) with core CPI at about 3.0–3.1% depending on the series; the BEA’s Personal Consumption Expenditures (PCE) price index — the Fed’s preferred gauge — measured September’s annual PCE inflation at about 2.8% (core PCE similar) [1] [2] [3] [4]. Official agencies measure inflation by tracking price indexes (CPI and PCE) that compare the cost of a fixed “basket” of goods and services over time [5] [6] [7].
1. What the official numbers said in September 2025 — the headliners
The Bureau of Labor Statistics’ September 2025 CPI release reported a 0.3% month‑over‑month increase in the CPI‑U and showed the headline 12‑month CPI rise near 3.0% (news aggregates and BLS tables report a year‑over‑year CPI around 3.0 after August’s 2.9%), while core CPI (all items less food and energy) rose 0.2% on the month and about 3.0% year‑over‑year in September according to published tables [1] [8] [2] [9]. Separately, the Commerce Department’s PCE price index — the Federal Reserve’s preferred inflation measure — registered a 2.8% annual increase for September 2025 (core PCE also roughly 2.8%), per BEA reporting cited in financial coverage [3] [4].
2. Why two different “official” numbers matter — CPI vs. PCE
The CPI (from BLS) and the PCE (from BEA) are both official measures but are constructed differently and therefore produce different point estimates. The CPI measures price changes faced by urban consumers for a fixed market basket and is the widely quoted consumer cost‑of‑living gauge [5] [10]. The PCE measures prices of goods and services purchased by or on behalf of consumers and uses different item weights and formulas — which is why the Fed cites PCE when setting policy [7] [3].
3. How these indexes are calculated in practice
Statistical agencies build a representative “basket” of goods and services and compare its current cost to past costs to produce an index; the inflation rate is the percentage change in that index over a chosen period (month‑to‑month, quarter‑to‑quarter or year‑over‑year) [11] [12]. The BLS uses household expenditure surveys and price sampling to update CPI weights and applies seasonal adjustments (X‑13ARIMA‑SEATS) to monthly series; the BEA’s PCE uses business‑and‑government transaction data and different weighting and formula choices [1] [7] [12].
4. Which number policymakers watch and why
Federal Reserve officials prefer the PCE price index because its weights better capture changing consumer spending and it covers a broader range of expenditures, including spending paid on consumers’ behalf (health care, for example) [7] [3]. That preference shapes monetary policy debates: core PCE is treated as a clearer signal of underlying inflation trends than headline CPI in many Fed communications [3] [7].
5. How headline and “core” measures differ and what each tells you
Headline inflation includes all CPI or PCE components, so energy and food swings show up directly; core measures strip out energy and food to reduce volatility and highlight underlying trends. In September 2025 energy prices rose notably on the year and helped lift headline readings, while core measures increased more modestly — an important distinction for interpreting whether inflation pressures are broad‑based or concentrated [2] [9] [8].
6. Reporting caveats and context from 2025 data releases
September’s official reports were issued amid an unusual reporting environment: government shutdowns and staffing issues delayed or canceled some monthly releases (October’s CPI was canceled), and some releases required recalled staff to ensure publication — conditions that complicated market response and forecasting [2] [13] [14]. Analysts also produced nowcasts and forecasts (e.g., Cleveland Fed models) to fill gaps when official tallies were delayed [15].
7. What these numbers imply for consumers and policy
A roughly 3% headline CPI and ~2.8% PCE in September means prices were rising faster than the Fed’s 2% target but not at the double‑digit rates seen earlier in the decade; that distinction helped shape Fed deliberations about rate cuts versus staying on hold in late 2025 [4] [3]. Different measures tell competing stories: CPI’s 3.0% headline pace can fuel political and public concern about cost of living, while the Fed emphasizes the slightly lower PCE readings when arguing inflation is moderating [2] [3].
Limitations: this summary uses the BLS CPI and BEA PCE reporting and contemporaneous news coverage; alternative inflation measures (median CPI, trimmed means, PPI, C‑CPI‑U, GDP deflator) exist and can give different perspectives — sources above explain these choices and tradeoffs [6] [16] [7].