WASHINGTON (AP) — Inflation likely worsened in September in one of the last price reports the government will issue before the midterm elections that have been heavily defined by concerns over affordability.
Consumer prices are forecast to have risen 3.6% in September compared with a year earlier, up from 3.4% in August, according to a survey of economists by data provider FactSet. The Labor Department will issue the report Wednesday morning.
On a monthly basis, prices are expected to have risen 0.6% from August to September, FactSet said, up from 0.4% the previous month and the biggest jump since April.
The figures will likely underscore the lingering impact of the Iran war on gas prices and the stubborn persistence of inflation, which has fallen sharply from a 9.1% peak in 2022 but has ticked higher since the war began in late February. Elevated inflation has posed political problems for Republicans in Congress and is a challenge for the Federal Reserve, which is required by Congress to seek stable prices.
Ongoing inflation has taken a toll on Trump’s standing with U.S. voters. A poll by The Associated Press-NORC Center for Public Affairs Research found that just 17% of U.S. adults approve of his handling of the cost of living issue. And only 26% approve of his handling of the economy overall, a new low.
Excluding the volatile food and energy categories, core prices likely rose 2.5% in September from a year ago, up slightly from 2.4% in August. That is closer to the Fed's 2% inflation target, but it has been stuck at mostly that level since January of this year — just before the Iran war. Core prices are forecast to have risen just 0.2% from August to September.
Federal Reserve officials are watching inflation data closely to determine whether they need to raise their short-term interest rate further, and by how much.
Fed Chairman Kevin Warsh said last month that inflation isn't moving quickly enough back to the central bank's target, causing the Fed to hike rates for the first time in three years, to about 3.9%.
“The plain fact is that inflation is too high and has been for too long,” Warsh said at a news conference last month. Inflation reports over the summer “do not tell me that underlying trends have meaningfully improved,” he added.
Yet some key Fed officials have suggested the central bank can wait before increasing rates again. The Fed has a policy meeting Oct. 27-28, but most Wall Street investors expect it to hold rates then, and potentially implement another hike in December. Fed officials have penciled in just one more rate hike this year.
By raising borrowing costs, the Fed hopes to slow spending and growth and cool price increases. Yet much of the current inflation comes from supply shocks, such as the Iran war's disruption to oil and gas supplies, and higher interest rates can't address those bottlenecks.
Warsh has said his goal is to keep the gas price spike from seeping into more areas of the economy. It's already pushed up the price of air fares about 23% from a year ago. Gas prices jumped about 9% from August to September, a big increase that will drive much of the overall jump in inflation. Rising gas costs are a highly visible sign of inflation and often drive down measures of consumer sentiment about the economy.
Prices at the pump have ticked lower in recent weeks, though they remain higher than a month ago. Gas prices averaged $4.34 a gallon nationwide Tuesday, up a few cents from a month earlier.
Those costs raise shipping and other expenses for many large and small businesses, some of which are forced to pass the cost to consumers. Last week, PepsiCo said that it will raise prices for its snack foods, including Doritos, Ruffles, Sun Chips, and some sodas to offset higher costs for fuel, aluminum, and food ingredients.
The artificial intelligence buildout has also sharply elevated the cost of semiconductors, computer equipment, and electrical components, which have been passed into costs for consumer electronics such as gaming devices, laptops, and smartphones.
On September 1, Nintendo increased the price for its Switch 2 gaming system by 11% to $499.99. And Apple's newest iPhone, the iPhone 17, cost about 10% more than its previous upgrade, though some of that likely reflects greater capabilities.
A woman pushes a shopping cart as she leaves a grocery store in Arlington Heights, Ill., Wednesday, Sept. 30, 2026. (AP Photo/Nam Y. Huh)
CAIRO (AP) — New explosions were heard in the Saudi capital, residents said Wednesday, as blame again quickly fell on Iran-backed Houthi rebels in neighboring Yemen. A Houthi official told The Associated Press that powers including Russia and China had reached out to the rebels in search of a ceasefire deal.
The sight of smoke rising from some of Saudi Arabia’s most sensitive facilities in recent days has rattled the region and global markets while increasing questions for President Donald Trump, who has said he is evaluating whether the U.S. should join Saudi strikes against the Houthis.
In the latest attacks, the Saudi-led military coalition fighting the Houthis said it intercepted cruise and ballistic missiles and drones targeting the capital, Riyadh; a ballistic missile targeting Dhahran, which hosts the headquarters of Saudi oil giant Aramco; and a cruise missile targeting Al-Kharj, home to Prince Sultan Air Base and the state-owned Military Industries Corporation.
The Houthis have repeatedly targeted Saudi airports, military facilities and oil infrastructure in the latest front in the Iran war. One of the Riyadh residents, who spoke on condition of anonymity for their safety, lives in northern Riyadh, where King Khalid International Airport — targeted multiple times in the past week with strikes that have killed at least 18 people and hurt over 300 more — is located.
The Houthis called the latest attacks retaliation for “treacherous Saudi aggression” against the rebel-held Yemeni capital of Sanaa and other areas. Separately, the rebel-run Health Ministry reported two dead in attacks in Yemen on Tuesday and blamed the Saudis.
The Houthis, hardened by years of civil war, have emerged as Iran's most effective armed proxy of the moment, but experts say they also have their own agenda. Either way, they are applying increasing pressure on a key U.S. ally.
A senior Houthi official told The Associated Press that regional and international powers have reached out in an effort to stop the attacks on Saudi Arabia as part of a ceasefire deal.
Mohamed al-Bukhaiti, a member of the Houthis’ political bureau, said Oman has tried to get both sides back to the negotiating table, and Russia and China also tried via Iran.
“We’re welcoming any mediation that leads to an end of the war and the blockade between Sanaa and Riyadh,” he said. “We’re ready for a comprehensive end of the war and the blockade from both sides, not just a temporary ceasefire."
The rebels continued to warn of attacks on both airports and oil facilities. Over 3,000 flights scheduled to depart from airports across Saudi Arabia have been canceled or listed as not operating in the past week, according to aviation analytics firm Cirium.
The escalation has highlighted Saudi Arabia’s struggle to intercept Houthi missiles and drones. The kingdom has pressed allies like the United States for more military support. Regional officials say Saudi Arabia, the world’s top purchaser of U.S. weapons, is running low on interceptors.
The Saudis are trying to intercept daily attacks across a territory about three times the size of Texas. Experts have said trying to intercept all of the missiles and drones is impossible. The Houthis have a large arsenal capable of striking targets well over 1,000 miles (1,600 kilometers) away. Some warheads change direction during flight.
Even interceptions are a danger. Overnight, Saudi Arabia’s Civil Defense said debris from two intercepted Houthi ballistic missiles fell on residential areas in Riyadh, injuring four people including a child and damaging 15 homes.
Meanwhile, the Saudis have been carrying out airstrikes in rebel-held areas of Yemen in support of the country’s internationally recognized government. The fighting erupted this year when the rebels blamed the Saudis for a strike on the airport in rebel-held Sanaa. That attack revived anger over a Saudi blockade of the Houthis. The rebels in turn declared their own blockade against the kingdom.
A week and a half ago, the Saudi-led coalition responded with a major military offensive.
On Wednesday, the Houthi-run Health Ministry said two people were killed in an airstrike Tuesday in the Ras Isa port area in Hodeida province. The strike hit a facility of the state oil company and wounded two others, the ministry said, and blamed Saudi Arabia. The Saudi-led coalition also attacked an oil facility in Sanaa.
The targeting of fuel storage facilities in Houthi-controlled areas marks a new phase, said Ahmed Nagi, senior Yemen analyst at the International Crisis Group, a think tank. He added that in a war of attrition, the rebels could risk losing much of their military capacity.
“The Houthis are betting on pressure, while the Saudis are betting on time. The Houthis are trying to strike critical infrastructure in Saudi Arabia to raise the cost of continued military intervention and support for the Yemeni government,” Nagi added.
Meanwhile, the fighting has revived Yemen's civil war after four years of relative calm.
The International Committee of the Red Cross said all front lines there have seen an “unprecedented surge in weapon-wounded cases,” especially in Marib, Taiz and along the Red Sea. Hospitals are overwhelmed and "mass-casualty influxes are increasingly frequent.”
Meanwhile, the World Food Program said it can no longer reach over 600,000 people in the besieged city of Taiz who depend on aid.
Anna reported from Jerusalem. Associated Press writers Sarah el Deeb in Beirut and Fatma Khaled in Cairo contributed.
FILE -Birds fly over a billboard advertisement for Saudi Arabia's state-owned oil giant Aramco, with Arabic that reads, "Saudi Aramco, soon on stock exchange," in Jiddah, Saudi Arabia. (AP Photo/Amr Nabil, File)
