September Inflation Jumps to 3.7 Percent as Diesel Hits $6.33 a Gallon
Rising wholesale prices and pump costs are squeezing small businesses and workers months before most people see it on a bill.
Annual inflation, measured by the consumer price index, rose from 3.4 percent in August to 3.7 percent in September, the Bureau of Labor Statistics reported this week. A day after that, the BLS said wholesale prices had their biggest monthly jump in more than four years. Put those two numbers next to the price of gas and diesel at the pump and you get a pretty clear read on where costs are headed before the next round of bills shows up for small business owners and workers.
Doug Heye, a Republican strategist, called it "a continuation of bad news, confirming what voters are telling us every day of what they're experiencing." I don't think you need a strategist to tell you that. You can see it in a fuel receipt.
Diesel at $6.33 a Gallon Hits Every Small Business That Moves Something
Diesel is averaging $6.33 a gallon as of Friday, according to AAA. A year ago it was $3.65. Regular gas is at $4.33, up from $3.06 a year ago. That's not a rounding error, that's a business cost that shows up on every delivery run, every job site visit, every truck that has to move material or equipment.
The Democratic-led Joint Economic Committee put a number on what that means for a household: gas price spikes tied to the Iran war have cost the average American family $856. Sen. Maggie Hassan called it the opposite of the relief Trump promised. I'm not going to referee the politics of who caused what. What I'll say from running a marketing company for home service contractors is that fuel cost increases like this don't stay with the business owner. They either get absorbed into a thinner margin or they get passed to the customer in the next quote. Either way, somebody's income takes the hit.
Wholesale Prices Up 10.8 Percent Is a Preview of Your Next Insurance Renewal
Wholesale energy prices rose 10.8 percent from August to September, the BLS reported, higher than the 10.5 percent jump back in March when the Iran war started. Wholesale prices overall had their biggest monthly jump in four years.
In my insurance agency, wholesale cost increases like that are not an abstract number, they're next year's replacement cost on every property and auto policy on the books. When it costs more to repair a roof, replace a vehicle, or rebuild a commercial space, carriers reprice to match it at renewal. That lag usually runs six to twelve months behind the data you're reading right now. If wholesale prices are jumping this fast in September, expect renewal notices through next year to reflect it, not this one.
Why Employers Freeze Hiring When Costs Won't Settle Down
Roughly six in 10 respondents to a recent AP-NORC poll said the economy is worse off since Trump returned to office. A NewsNation and Decision Desk HQ poll found 51 percent of respondents are casting their midterm vote to oppose Trump and his policies.
I don't hire or fire based on a poll, and neither does any business owner I know. But sentiment like that tracks with something real: when customers feel squeezed by gas and grocery prices, they spend less on everything else, and that is exactly when a small business owner pulls back on hiring instead of adding a position. Jim Kessler of the think tank Third Way put it plainly: "If the numbers had come in a lot better both in September and October on inflation, and the Trump administration had something to say, then people might feel that things are turning around." Right now that's not the data we have.
The Spin Versus the Pump Price
Kevin Hassett, director of the National Economic Council, told NewsNation the top-line inflation number was driven by an energy price surge that the administration believes will be temporary, and that there's good news elsewhere in the report.
Maybe the energy spike is temporary. But $6.33 diesel and $4.33 gas are what a contractor or delivery business is paying today, not what they might pay if the surge fades. Mike Marinella of the National Republican Congressional Committee countered that Republicans are "working to lower costs and repair the damage Democrats left behind." Democratic strategist Antjuan Seawright said his party is "unified" around affordability "for the first time in my lifetime." Both sides agree the cost of living is the issue. They disagree on who owns it. For a reader trying to run a business or find a job, the disagreement matters less than the number on the receipt.
What to Watch Before Your Next Renewal or Rate Increase
If you run a business that depends on trucks, delivery, or anything that burns diesel, reprice your jobs now instead of waiting for the next fuel surcharge to force your hand. Lock in supplier contracts where you can.
If you're a homeowner or business owner with a policy renewing in the next six months, ask your agent now what replacement costs look like for your property and vehicles, before the renewal notice arrives with no warning.
And if you're job hunting, know that a business owner watching gas, diesel, and wholesale prices climb like this is more likely to delay a hire than add one. That's not a reason to stop looking, it's a reason to make the case for why you fill a gap rather than add overhead.