UBS Economics-US Economic Perspectives _September CPI recap Noise startin...-118474450

ab24 October 2025Global ResearchUS Economic PerspectivesSeptember CPI recap: Noise starting nowUpcoming releases will be more impacted by the government shutdown
Beyond being delayed, we do not think the September CPI was affected by the government shutdown. All (or nearly all) of the data used in the September CPI would have been collected prior to the October 1 shutdown, so there is little reason to believe that the noise in the September CPI was any different than the average recent survey error (where the number of observations has been cut by around 18% since April).
In contrast, upcoming CPI releases will be considerably more affected by the government shutdown. The guidance provided by the BLS on the recall of staff to produce the CPI released today only mentioned the September CPI. It did not mention the October CPI or collection of data during the government shutdown. The reasoning used for recalling CPI staff for the September CPI (social security escalation) does not apply to October as that escalation is only done once a year based on data for July, August, and September.
We are in unprecedented times for the BLS. To our knowledge there has not been another time when the BLS has been shut down for an entire calendar month. We think it is likely that if the Government remains shutdown through early next week then there will not be enough data available for the BLS to put out an October CPI. Indeed, in a post on X this morning, the White House indicated there would likely be no inflation report next month. That said, it is possible the BLS at some point might try to obtain or estimate October prices retrospectively. (In fact, much of the data now used in the official CPI series for 1913 to 1917 was collected retrospectively.)
Additionally, the normal CPI process requires a prior observation for items on which advance the index. (See here for the technical details.) Without much (or any) October data this will force the BLS to change procedures on the fly and will likely lead to more volatily in the November CPI. Since many items are only sampled every other month, and housing rents only every six months, the volatility of the December and April CPIs will also be impacted.Headline CPI +0.31%: 12-month inflation rises to 3.01%
The headline CPI increased 31bp (seasonally-adjusted) in September — 4bp below our expectations and 6bp below the Bloomberg consensus average (UBS Econ projection +0.35%, UBS Evidence Lab Nowcast +0.39%, Bloomberg consensus average +0.37%).
On a 12-month change basis, headline CPI inflation has risen in each of the past five months: from a post-pandemic low of 2.31% in April to 2.92% in August then to 3.01% in today's report for September. We expect that headline inflation will continue to trend up through the first part of next year.
After rising 1.7% in August, prices for gasoline and other energy commodities jumped 3.8% in September on a seasonally-adjusted basis. Looking more broadly, gasoline an