Headline re-accelerated, and core stopped cooling. September CPI jumped to +3.72% (+0.6% m/m) as energy ran +20.4% YoY on a +34% gasoline spike. More worrying, core turned up to +2.57% from +2.45% — the first rise since May. The pipeline kept heating: PPI hit +6.35%, ~263 bp above headline CPI, with goods +9.8% and trade margins +15.9%.
The labor side softened again: payrolls added only +29k, August was revised down from +162k to +133k and July to −10k, leaving the 3-month average at +51k. U-3 ticked up to 4.2%, but on the good side of the ledger — participation rose for a second month to 61.8%. Openings slipped to 7.08M. Soft, not breaking: Sahm is still 0.00.
Core +2.57% → 57 bp above target
Core had been grinding toward 2% all summer; September reversed part of that. Shelter (+3.22%) and core services (+3.16%) re-firmed, and the energy shock is starting to leak into transportation services (+2.77%).
| Component | Index | YoY | Weight signal |
|---|
| Series | Index | YoY | Read |
|---|
| Services | ||
| Core services | +3.16% | |
| Shelter | +3.22% | |
| Owners' equiv rent | +3.28% | |
| Rent of residence | +2.78% | |
| Medical services | +2.53% | |
| Transportation services | +2.77% | |
| Airline fares | +22.45% | |
| Goods | ||
| Core goods | +0.71% | |
| New vehicles | +0.61% | |
| Used cars & trucks | −1.46% | |
| Medical commodities | −3.27% | |
| Energy | ||
| Gasoline | +34.17% | |
| Utility (piped) gas | +4.97% | |
| Electricity | +4.37% | |
| Food | ||
| Food away from home | +3.46% | |
| Food at home | +1.77% | |
| Goods | ||
| Final demand goods | +9.77% | |
| Energy | +3.87% | |
| Foods | −0.83% | |
| Services | ||
| Final demand services | +4.92% | |
| Trade services (margins) | +15.88% | |
| Transportation & warehousing | +4.74% | |
| Flow | Level | Rate | Signal |
|---|---|---|---|
| Job openings | 7,079k | 4.3% | ▼ from 7,335k |
| Hires | 5,192k | 3.3% | low-hire |
| Quits | 3,066k | 1.9% | confidence soft |
| Layoffs | 1,641k | 1.0% | low-fire |
| Tightness Ratio Job openings per unemployed person | 1.00 | balanced |
| Job Growth (Sep) MoM change in jobs created | +29k | weak |
| Unemployment Δ Change in unemployment rate | +0.1% | ▲ ticked up |
| 3-Month AVG 3-month average job growth | +51k | soft |
| Unemployment Level MoM Change from previous month | +78k | ▲ |
| Sahm Rule Recession Indicator Anything > 0.5 = recession looming | 0.00 | not triggered |
| Revision Bias Score Neg = weaker than reported · Pos = under-appreciated strength | −13k | ~neutral |
| Month | First print | Current | Revision |
|---|---|---|---|
| Jan 2026 annual benchmark | −899k | +160k | +1,059k |
| Feb 2026 | −161k | −156k | +5k |
| Mar 2026 | +171k | +214k | +43k |
| Apr 2026 | +99k | +148k | +49k |
| May 2026 | +265k | +63k | −202k |
| Jun 2026 | −17k | +31k | +48k |
| Jul 2026 | −23k | −10k | +13k |
| Aug 2026 | +162k | +133k | −29k |
| Sep 2026 first print · no revision yet | +29k | +29k | — |
| Series | Mean bias | 1σ band | Skew |
|---|---|---|---|
| Payrolls m/m change · n=139 | +2k | ±200k | 50% down |
| Unemployment (U-3) rate, pp | ~0 | ±0.065 | symmetric |
| CPI all-items index | ~0 | ±0.23 | symmetric |
| Core CPI index | ~0 | ±0.19 | symmetric |
| PPI final demand index | ~0 | ±0.25 | symmetric |
| Avg hourly earnings $/hr | ~0 | ±$0.05 | symmetric |
Unit labor costs — not average hourly earnings — are the wage measure the Fed watches. ULC nets out productivity: a raise that's matched by higher output per hour isn't inflationary. At +1.4% YoY, ULC is running below the +3.02% AHE growth shown above, because productivity (+2.2%) is absorbing most of the pay increase.
This is a quiet disinflationary signal that reinforces the cooling core CPI. The caveat sits in real hourly compensation, down 3.1% annualized — the efficiency gains are accruing to margins, not to workers' real paychecks this quarter.
The data says hike; the calendar says wait. The Fed hiked 25 bp on Sep 16, and September's prints argued for more: headline CPI +3.72%, core turning up to +2.57%, and PPI at +6.35%. After the CPI release on Oct 14, October hike odds briefly jumped to ~42%.
They have since collapsed to ~9%. Several officials have called for patience, the labor market is soft (+29k, 3-mo +51k), and the meeting lands six days before the Nov 3 midterms. The market has moved the next hike to December (~80% priced). Swing inputs: PCE and Q3 GDP this week, then the October jobs report and October CPI in November. Energy is the wild card — the inflation impulse is concentrated in gasoline.