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Inflation ticked up 0.3 percent for the month and 3 percent over the past 12 months as President Donald Trump defended his tariffs against Canada.
The Bureau of Labor Statistics on Friday released the Consumer Price Index report that tracks inflation. The report had been delayed due to the government shutdown that began this month. The shutdown has also delayed the monthly jobs report that shows how many jobs were added or lost during September.
White House Press Secretary Karoline Leavitt touted the numbers, blaming Democrats for shutting down the government.
“Democrats choosing to keep the government closed will likely result in no October inflation report, which will leave businesses, markets, families, and the Federal Reserve in disarray,” she said in a statement. Kevin Hassett, director of the National Economic Council for the president, said that the “numbers were fantastic.”
The news came as Trump announced that all talks with Canada would cease in response to the United States’s northern neighbor running ads featuring out-of-context comments from the late president Ronald Reagan speaking negatively about tariffs.
The president repeated his claims that tariffs have helped the economy. The Supreme Court will begin hearing whether the International Emergency Economic Powers Act gives the president authority to impose his tariffs.
“THE UNITED STATES IS WEALTHY, POWERFUL, AND NATIONALLY SECURE AGAIN, ALL BECAUSE OF TARIFFS! THE MOST IMPORTANT CASE EVER IS IN THE UNITED STATES SUPREME COURT,” Trump said on Truth Social early on Friday before the release of inflation numbers. “GOD BLESS AMERICA!!”
New inflation numbers will likely come as unwelcome news to President Donald Trump as he wages a fresh trade war with Canada over an ad featuring Ronald Reagan (AFP via Getty Images)
Consumers have slowly begun to feel some of the effects of the tariffs, but not all of them. A report from Goldman Sachs found that companies have passed 37 percent of the cost of the tariffs to consumers and 9 percent to their suppliers while they have eaten 51 percent of the cost of the tariffs.
Tariffs have become a hallmark of the president’s second tenure in office, despite pausing them after the initial announcement of across-the-board reciprocal tariffs in April.
As part of his feud with Canada, he levied a 25 percent tariff on all goods from Canada and an additional 50 percent tariff on aluminum and steel, of which Canada is a major supplier.
The price of gas drove much of the increase of inflation, as the index for gasoline rose by 4.1 percent in September and the index for energy overall 1.5 percent. Hassett attributed the increase to a shutdown of a refinery in Indiana, which caused energy prices to spike.
The index for food rose by 0.2 percent in September and it rose 3.1 in the past year. The price of beef and veal rose 1.2 percent in the past month, which comes Trump has proposed importing beef from Argentina.
The index for bananas rose 0.4 percent in the past month and 6.9 percent in the past 12 months as Trump has enacted his “Liberation Day” tariffs that included tariffs on Latin American countries from which the United States sources bananas.
The core CPI index, which measures all items minus food and energy, rose 0.2 percent in September, which is slightly down from the 0.3 number from the previous two months.
The index shelter for rose 0.2 percent in September, with the owner’s equivalent of rent rising only 0.1 percent, the lowest increase since 0.1 percent. But the index for rent rose 0.2 percent. Airline fares rose 2.7 percent in September, which is slightly down from its 5.9 percent increase in August.
The inflation numbers will almost certainly be a major data point for the Federal Reserve as the Federal Open Market Committee meets next week to determine whether to raise interest rates the same. The government shutdown means the central has little information to make a decision about rates as it balances whether to keep inflation down or keep unemployment low.
The Bureau of Labor Statistics has been a source of anger for Trump since last year’s presidential election. In August, he fired Erika McEntarfer, the commissioner for the bureau, after a poor jobs report.