Inflation Hit 3.7% in September 2026: The Raise You Need Just to Break Even
- The CPI-U rose 0.6% in September 2026 and 3.7% over the 12 months, up from 3.4% in August.
- Gasoline rose 9.1% in the month and accounted for over half of the monthly increase; it was up 34.2% over the year.
- Prices excluding food and energy rose 2.6% over the year.
The Consumer Price Index is the number to beat when you ask for a raise. If your pay rises less than prices, you’re effectively taking a pay cut. Here is what the September 2026 report showed (BLS Consumer Price Index, September 2026).
The headline
The CPI for All Urban Consumers rose 0.6% on a seasonally adjusted basis in September after rising 0.4% in August. Over the last 12 months, the all items index increased 3.7% before seasonal adjustment, a larger increase than the 3.4% for the 12 months ending in August.
Where prices rose most
| Category | 12 months to September 2026 |
|---|---|
| Energy | 20.4% |
| Gasoline (all types) | 34.2% |
| Fuel oil | 74.2% |
| Electricity | 4.4% |
| Food away from home | 3.5% |
| Shelter | 3.2% |
| Food at home | 1.8% |
| Used cars and trucks | −1.5% |
| All items less food and energy | 2.6% |
| All items | 3.7% |
Energy is doing most of the work. The energy index rose 5.2% in September alone, and the gasoline index rose 9.1%. Food at home actually fell 0.1% for the month, while restaurant meals rose 0.2%. Indexes that increased in September also included recreation, education, airline fares, medical care and apparel; communication was among the few that fell.
What this means for your raise
A raise of 3.7% would only keep your buying power where it was a year ago. Compare that with the most recent Employment Cost Index, which showed wages and salaries up 3.2% over the year to June 2026 (BLS Employment Cost Index, June 2026). The typical raise is running behind prices.
- Lead with the 3.7% figure when you argue a cost-of-living adjustment, and note that it is the official government number.
- If your commute is long, gasoline (up 34.2% over the year) is a concrete, personal cost to point to.
- Ask for a merit increase on top of inflation, not instead of it.
- The core rate (2.6%) is what employers may cite back; be ready for that comparison.
Published October 27, 2026. Sources are linked in the text.
Header image: original graphic by JobPayRaise.com.
Comments (1)
Inflation has already pulled real pay down: BLS reported that real average hourly earnings for all employees fell 0.7% from September 2025 to September 2026. Source: BLS Real Earnings, September 2026.