WASHINGTON (AP) — High gas prices are intensifying inflation and vacuuming up more of Americans' dollars, yet consumers are still digging deep to spend, powering the economy, at least for now.
A slew of economic data Thursday showed that inflation accelerated last month as more expensive oil and gas began to lift prices in other parts of the economy, including shipping and warehousing, before the increases reach most Americans.
Wholesale food prices jumped, which could make groceries more expensive in the months ahead.
At the same time, consumers also ramped up their spending, according to data released Thursday. Though much of the increase reflected higher prices, consumer resilience is powering solid U.S. economic growth.
Workers are enjoying an unusual degree of job security despite scattered layoffs, which likely encourages spending despite surveys showing that many Americans have a gloomy economic outlook.
It all adds up to an economy in which people are spending money but don't feel good about it.
“Consumers may have gritted their teeth and looked through higher gas prices,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors. “They're not happy, but they're still spending.”
A report Thursday on wholesale prices helps explain the gloom: The government's producer price index, which measures costs before they reach the consumer, jumped 6.3% in September from a year earlier, the biggest increase in nearly four years. On a monthly basis, prices soared 1.3% from August to September, powered by a 20% rise in gas prices.
Higher diesel prices have made shipping more expensive because long-haul trucks and freight trains rely on the fuel. Higher transportation costs may have helped push up food costs, which rose 1.2% from August to September, the biggest monthly gain since February. The wholesale price report followed the latest consumer price figures, released Wednesday, which showed inflation rising to 3.7% in September, far above the Federal Reserve's 2% target.
“The jolt to transportation prices affects every good in the economy, since inputs to manufacturing move to factories and goods at all stages of production move from producer to wholesaler to retailer by truck, train or rail,” wrote Carl Weinberg, chief economist at High Frequency Economics. “This is how increases in energy prices ‘bleed through’ to prices of core goods.”
Farmers also rely on diesel to power most of their equipment, which could further push up food prices. Diesel prices averaged $6.32 a gallon nationwide Thursday, according to AAA, up from just $3.66 a year ago.
Despite those cost pressures, retail sales rose a solid 0.8% from August, more than economists had forecast. The increase was driven by a 6.4% jump in spending at gas stations, but consumers also spent elsewhere, including a healthy 1.1% rise at restaurants and bars.
Excluding gas, retail sales rose just 0.2% last month, with much of that also reflecting higher prices.
Economists say that as long as unemployment stays low and Americans continue working, spending will likely stay resilient. Hiring has been sluggish, but layoffs are also unusually low.
Another report Thursday showed that the number of people seeking unemployment benefits stayed below 200,000 last week, a historically low figure. Applications for unemployment aid are a proxy for layoffs.
“If the unemployment rate remains low, meaning consumers have a job, they will continue to spend, even if more cautiously and leaning increasingly on savings and credit,” Kathy Bostjancic, chief economist at Nationwide, said in an email.
Many economists worry, however, that as inflation stays high, it will steadily erode Americans' spending power and start to weigh on the economy. Weekly paychecks, adjusted for inflation, actually declined in September compared with a year ago for the first time since May.
And September hiring slowed to a disappointing 29,000 jobs from a revised 133,000 in August, according to the Labor Department early this month. The unemployment rate ticked higher to 4.2% from the previous month, which is still low. Yet economists had expected September payrolls to come in around 90,000.
Stubbornly elevated inflation also means the Federal Reserve will likely raise its key interest rate in the coming months in an effort to slow spending and bring down inflation. When the Fed raises its rate, that can raise borrowing costs for mortgages, car loans, and credit cards over time.
According to minutes released from the most recent meeting, most Fed officials expect that another interest rate increase will likely be needed this year to combat inflation.
The Fed increased its key interest rate by a quarter-point to about 3.9% in September, its first increase in three years.
The increase defied President Donald Trump’s repeated calls for the Fed to cut rates and prompted the president to criticize the Fed’s rate-setting committee, though he still expressed support for Chairman Kevin Warsh, whom he appointed earlier this year.
Shoppers walk along the Design District Wednesday, Oct. 14, 2026, in Miami. (AP Photo/Marta Lavandier)
Gas prices are seen at a gas station in Deerfield, Ill., Wednesday, Oct. 14, 2026. (AP Photo/Nam Y. Huh)
A shopper looks the meat section of a grocery story in Fort Worth, Texas, Wednesday, Oct. 7, 2026. (AP Photo/LM Otero)
NEW YORK (AP) — Manhattan's Upper West Side has been reveling in the company of its latest celebrities: A family of barn owls nested in a water tower atop a building near Central Park.
This is the first documented instance of barn owls nesting in Manhattan in modern history, according to one expert, and the owls have attracted nightly crowds of people in the street eager to get a glimpse of the elusive birds.
“It was, like, totally shocking,” Andrew Farnsworth, a migration ecologist at the Cornell Lab of Ornithology, said of the barn owls. “To the best of our knowledge, like the collective birding knowledge, there hasn’t been a nest in, you know, in Manhattan, at least in recorded history.”
Word of the barn owl family didn't get around until last week, when Elisabeth Williams, an Upper West Side resident, notified a local news outlet on Oct. 6 that she and her husband saw multiple owls at the water tower atop a building on West 75th Street close to Central Park West.
The couple had previously seen a single owl on an apartment windowsill a few days earlier and were shocked even then, Williams recalled.
“In a place like Manhattan, you normally really have to go out of your way to encounter nature,” she said. “And here it was, just sort of right outside our window.”
It's not the first time that birds have captivated New Yorkers. Residents have fallen in love with American woodcocks, who are known to stop in Midtown Manhattan’s Bryant Park every year as they migrate north in early spring. After Flaco the Eurasian eagle-owl died in 2024, dozens of mournful fans gathered to say goodbye to the beloved creature who flew around Manhattan and became a joy to many after someone let him out of his zoo enclosure the previous year. Then there was Pale Male, a red-tailed hawk who nested above Fifth Avenue for three decades before dying in 2023.
But barn owl sightings in New York City parks are very rare, according to the New York City Department of Parks & Recreation. New York is at the northern fringe of the barn owl's range and the barn owl population has declined “at an alarming rate” over time, according to the state Department of Environmental Conservation.
“There’s lots of excitement among New Yorkers, both birders and non-birders alike, about these owls because owls really capture the attention,” said Jessica Wilson, executive director of NYC Bird Alliance. “They’re magical, they’re nocturnal, they are secretive, they’re not commonly seen, especially on the Upper West Side of Manhattan. And to have this chance to see these birds is really thrilling.”
Photographers and casual onlookers have gathered on the street on a nightly basis to spot the owls.
“I’ve only seen one barn owl ever, and that was in California,” said Val Coleman, a retired New York City resident who was on the Upper West Side earlier this week trying to spot the owls. “At dusk, we hope they will come out to hunt. We hope they don’t eat poisoned rats with rodenticide in ’em.”
David Barrett, a Manhattan-based birder who runs the popular social media account, Manhattan Bird Alert, said he’s observed at least one adult barn owl and five fledglings at the water tower. He’s also seen an adult owl carrying rodents back to the water tower. There are believed to be two adult owls, and some photographers have claimed to have seen six fledglings, Barrett added.
“Having one barn owl is a rarity, but it’s not national news. Having a family, for the first time ever, breeding in Manhattan in recorded history, that’s special news,” Barrett said.
Before the recent barn owl sightings, Williams and her husband heard periodic screeching noises outside going back to early September. They initially assumed it was a bird of some kind but were skeptical when a phone app indicated the noise was from a barn owl.
Thomas Obersteiner said that he first heard bizarre screeching and wailing noises from outside one evening in mid-September. It sounded like someone was “being murdered outside,” he said.
“That lasted for two or three weeks, every night, sometimes more, sometimes less, coming from different directions,” Obersteiner added. “But I had no idea what that was.”
On multiple occasions, Obersteiner or his wife ran into their children's bedroom after mistaking the owls' screech for a child in pain, he said. It wasn't until he saw a news report that he realized that owls were making the sounds.
Farnsworth said the screech is typical of barn owls, who use it to communicate with one another. The screech is like a “horror movie kind of experience,” he said.
Obersteiner, who said his roof deck is the “probably the best location in town right now” to watch the owls, has been letting nature photographers access that perch to observe the owls “almost every night” since news of the barn owls spread. On one night last week, 20 people had gathered.
“We can’t say no because it’s so much fun and these people are so serious,” Obersteiner added. “It's beautiful.”
Williams and her husband were not bird watchers before the barn owl family moved in to the water tower. But that may change soon after their “delightful” experience.
“I think we’re about to become birders,” Williams said.
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Kelety reported from Phoenix.
An American Barn Owl sits perched on a water tower on the Upper West Side neighborhood, Wednesday, Oct. 14, 2026, in New York. (AP Photo/Yuki Iwamura)
An American Barn Owl sits perched on a water tower on the Upper West Side neighborhood, Wednesday, Oct. 14, 2026, in New York. (AP Photo/Yuki Iwamura)
People look at American Barn Owls sit perched on a water tower on the Upper West Side neighborhood, Tuesday, Oct. 13, 2026, in New York. (AP Photo/Yuki Iwamura)
An American Barn Owl sits perched on a water tower on the Upper West Side of Manhattan, Wednesday, Oct. 14, 2026, in New York. (AP Photo/Yuki Iwamura)
An American Barn Owl sits perched on a water tower on the Upper West Side neighborhood, Wednesday, Oct. 14, 2026, in New York. (AP Photo/Yuki Iwamura)
