US Economy Check-In: Inflation Rises, Hiring Stalls Ahead of the Fed

The US economy is sending mixed signals this fall. Prices are rising faster, while hiring has nearly stalled. At the same time, growth held up through the spring. With the Federal Reserve meeting this week, here is a plain-English look at the latest numbers.

Inflation is moving higher

Consumer prices rose 3.7% over the past year in September, according to Bureau of Labor Statistics data reported by Kiplinger. That was up from 3.4% in August. Prices rose 0.6% in September alone.

Energy drove much of the jump. The gasoline index climbed 9.1% in the month and accounted for more than half of the overall increase. Shelter costs also rose, while food prices were flat.

However, the picture is calmer once food and energy are removed. Core CPI rose 2.6% over the year, up from 2.4% in August.

Hiring in the US economy has slowed sharply

The job market tells a different story. Employers added just 29,000 jobs in September, according to the BLS Employment Situation report. The unemployment rate rose to 4.2%.

Earlier months also looked weaker after revisions. July was revised to a loss of 10,000 jobs, and August was revised down to 133,000. Together, those two months came in 60,000 lower than first reported.

Health care, construction, and manufacturing added jobs. Meanwhile, government, information, professional services, and finance cut jobs.

Wages are falling behind prices

Average hourly earnings rose 3.0% over the past year, to $37.81. That is below the 3.7% inflation rate. In other words, on average, paychecks are not keeping up with prices right now.

The US economy grew through the spring

The broader US economy kept growing in the first half of the year. The Bureau of Economic Analysis says real GDP grew at a 2.2% annual rate in the second quarter of 2026, after 2.5% in the first quarter.

The first estimate for third-quarter GDP is due on Thursday, October 29. That report will show whether growth held up through the summer.

What the Fed may do this week

The Federal Reserve meets on October 27 and 28. In September, it raised its benchmark rate to a range of 3.75% to 4.00%. Most forecasters expect a hold this week. Our Fed meeting preview covers the details.

The Fed faces a tough balance. Higher inflation argues for keeping rates high. On the other hand, a weak job market argues for caution.

What the US economy means for your money

• Budgets. Gas and housing costs are the main pressure points. Tracking those two items can make the biggest difference.
• Debt. With rates elevated, paying down variable-rate balances such as credit cards can save money.
• Jobs. Hiring is slow, so building an emergency fund is a sensible step if you can.

For more on managing credit, see our guide to the credit utilization ratio. For more coverage, browse our Money & Finance section.

The bottom line

The US economy is growing, but prices are rising faster than wages and hiring has slowed to a crawl. This week brings the Fed decision and the first look at third-quarter GDP. Together, they will show which way the economy is leaning heading into the holidays.

Data as reported through October 27, 2026. This article is general information, not financial advice.