U.S. Inflation Outlook – August to October 2025

📊 U.S. Inflation Outlook – August to October 2025

July’s Producer Price Index surged 0.9% MoM, the largest rise since January 2023, driven by higher trade margins, transportation costs, and food prices. This broad-based producer cost pressure is now set to ripple through to consumers.

3-Month Headline CPI Forecast (YoY):

• Aug 2025: ~3.25% – Gasoline price drop softens, but doesn’t erase, goods/services cost pressures.
• Sep 2025: ~3.30% – Continued pass-through from services PPI, with retail margins pushing prices higher.
• Oct 2025: ~3.35% – Mild upward drift unless energy prices retreat.

🔹 Inflation remains well above the Fed’s 2% target, suggesting limited room for aggressive rate cuts.
🔹 Sticky core inflation is likely to persist, driven by services and select goods categories.
🔹 Businesses should prepare for ongoing cost pressure into Q4, especially in logistics, food, and wholesale trade.

📈 Chart below shows the expected path for headline CPI through October 2025.

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