Pantheon sees September CPI rising 0.6% as gasoline prices jump

U.S. consumer prices likely rose 0.6% in September, driven primarily by a nearly 10% jump in gasoline prices, while core inflation, which excludes food and energy, probably rose just 0.2%, Pantheon Macroeconomics said.

The split should allow the Federal Reserve to refrain from tightening policy again at its Oct. 28 meeting, Pantheon said. Higher gasoline prices are expected to add 0.4 percentage point to headline inflation. The report is due Wednesday.

The oil shock likely has started to lift core goods prices, but the pass-through should be gradual. Pantheon’s analysis points to a roughly six-month lag between changes in producer prices for processed materials and core goods CPI, excluding used vehicles.

Producer prices for those materials rose at a 0.7% monthly pace over the three months to March, compared with 0.4% in the previous three months, consistent with monthly core goods CPI increases of 0.2%. Manufacturing surveys also point to a 0.2% trend in core goods prices through year-end, Pantheon said.

The firm said tariff pass-through to consumer prices since April 2025 has been drawn out, showing retailers’ margins can adjust. Gauging that pass-through has become harder: Adobe no longer releases its Digital Price Index, the Dallas Fed discontinued its Texas Retail Survey, and OpenBrand and Truflation data correlate poorly with official figures.

Pantheon said it was therefore left with the Census Bureau’s Business Trends and Outlook Survey to gauge retailers’ price changes.

Within core goods, Apple introduced the iPhone 18 Pro at a higher price in mid-September and raised prices for existing models. Pantheon said Bureau of Labor Statistics quality adjustments should limit the new model’s CPI impact, while increases for older models will materially boost education and communication goods prices.

It forecasted a 1.2% rise in the category, adding only about 5 basis points to core goods inflation, with some impact likely captured in the Census Bureau survey. Manheim used-car auction prices fell 3.3% over the past three months, and Pantheon expects CPI used-car prices to be broadly flat in September.

Pantheon expects airline fares to be unchanged, which would mark the first month without an increase since December. August CPI airline-fare inflation was 23.4%, far above the 17.2% rise in average ticket prices reported by ARC, which processes airline and travel-agency ticket transactions. Pantheon said the gap suggests the CPI measure had overshot the underlying trend.

An upside core inflation surprise is more likely to come from goods than services, Pantheon said. CPI and producer-price data probably would have to point to a monthly increase of more than 0.30% in the core personal consumption expenditures deflator to put a rate hike back on the table, compared with the 0.2% print Pantheon expects.