US inflation rose 3.7% in September, more than economists expected and still well above the Federal Reserve’s 2% target, as the central bank weighs whether to hike interest rates again by year’s end.
The reading for the Consumer Price Index a closely watched measure of inflation that tracks changes in the costs of everyday goods and services matches the reading in August, and is slightly above the 3.6% advance that economists expected, according to data by the Bureau of Labor Statistics released Thursday.
On a monthly basis, inflation slowed to 0.4% from 0.6% in August, partly because of lower pressure from energy prices.
However, core CPI a number that excludes volatile food and energy prices and serves as a closely watched gauge among policymakers for long-term trends held steady at 0.3% month to month and rose 4.1% from a year ago, in line with expectations.
Though September’s CPI is also a cooldown from inflation’s 9.1% peak in June 2022, it still remains well above the Fed’s 2% goal. Stock futures dropped ahead of the market opening as traders increased their bets of another rate hike to around 50%, up from 30% earlier this week.
“The bigger picture is that the trend is still quite encouraging, but the fight continues,” said Olu Sonola, head of US regional economics at Fitch Ratings in New York. “They [Fed officials] may now want to extend the pause to December, given the recent increase in long-term rates.”
The gasoline index’s 2.1% advance was also a large contributor to the CPI, the data showed, though the federal agency said shelter’s 0.2% increase accounted for over half of the increase.
Gasoline experienced an eye-watering 10.6% increase last month, when AAA figures showed that the average price for a gallon of gas was $3.85.
As of Thursday, a gallon of gas in the US averages $3.65, according to AAA.
While many investors had been willing to look past the volatile energy numbers, a surprisingly resilient labor market has some worried that inflation could be more stubborn.
September’s employment report revealed that the US economy added a whopping 336,000 jobs last month — an unexpected surge that contradicts the notion the Fed may tamp down its aggressive tightening regime.
The blowout number was nearly double the 170,000 jobs economists had expected, and also sharply higher than an upwardly revised 227,000 jobs added in August, according to fresh data released by the Bureau of Labor Statistics last week.
The news sent yields on US Treasury bonds to their highest levels in 16 years and sent the Dow Jones Industrial Average into the red for 2023.
Since inflation hit a four-decade peak last summer, the central bank has worked to bring the stubborn figure down by hiking rates another 25 basis points to a 22-year high in August in hopes of an economic slowdown.
The benchmark federal funds rate currently sits between 5.25% and 5.5%. Last month, Fed officials unanimously decided to hold the record-high rate steady for the second time in six policy meetings so far this year.
But thanks to a strong labor market, the US economy has avoided a downturn, and even the Fed has said its no longer predicting the economy will slip into a recession by the end of the year.
“We must wait for more data to see if this is just a blip or if there is something more fundamental driving the increase such as higher rent increases in larger cities offsetting softer increases in smaller cities,” said US Bank of America Securities economist Stephen Juneau.
“When deciding whether to raise rates one last time this year, the FOMC will be asking whether inflation needs another nudge or if its getting to 2% on its own. Its increasingly looking like the latter,” NerdWallet data analyst Elizabeth Renter told The Post.
“The Fed, astheyreall too happy to remind us, is laser focused on getting inflation down to 2%.”
Fed Chair Jerome Powell has said central bankers will be taking a data-dependent approach moving forward, leaving more interest rate hikes before years end up in the air.
Markets were spooked ahead of the jobs report, falling more than 1% when the Labor Department released its Job Openings and Labor Turnover Summary, which showed job openings increased to 9.61 million in August up from 8.9 million in July.
iPhone Air is the big newcomer among Apple‘s latest lineup that went on sale Friday, but inside the slim phone’s raised plateau is another new piece of hardware that signals a renewed focus on artificial intelligence.
Apple’s custom A19 Pro chip introduces a major architecture change, with neural accelerators added to each GPU core to increase compute power. Apple also debuted its first ever wireless chip for iPhone, the N1, and a second generation of its iPhone modem, the C1X. It’s a move analysts say gives Apple control of all the core chips in its phones.
“That’s where the magic is. When we have control, we are able to do things beyond what we can do by buying a merchant silicon part,” said Tim Millet, Apple vice president of platform architecture. He sat down with CNBC at Apple Park in September for the first U.S. interview about the new chips.
Until now, Broadcom was the main provider of wireless and bluetooth chips for iPhones, although Apple has made networking chips for the AirPods and Apple Watch for nearly a decade. Apple’s N1 is in the entire iPhone 17 lineup and the iPhone Air.
Arun Mathias, Apple vice president of wireless software technologies and ecosystems, gave CNBC an example of the N1’s improved Wi-Fi functionality.
“One of the things people may not realize is that your Wi-Fi access points actually contribute to your device’s awareness of location, so you don’t need to use GPS, which actually costs more from a power perspective,” Mathias said. “By being able to do this more seamlessly in the background, not needing to wake up the application processor as much, we can do that significantly more efficiently.”
Apple’s new custom SoC for iPhone, A19 Pro, has neural accelerators added to the GPU cores to prioritize AI workloads
Qualcomm modems remain in the iPhone 17, 17 Pro and 17 Pro Max, but Apple’s C1X is in the iPhone Air.
“It may not be as good as Qualcomm’s yet, in terms of just overall throughput and performance, but they can control it and they can make it run at lower power. So you’re going to get better battery life,” said Ben Bajarin, CEO of Creative Strategies, a technology research and consulting firm. He expects Apple to “completely phase out” Qualcomm in the “next couple of years.”
Apple’s Mathias said the C1X is “up to twice as fast” as the C1 and “uses 30% less energy” than the Qualcomm modem in the iPhone 16 Pro.
Neither Qualcomm or Broadcom saw much market impact following Apple’s announcement, and both companies will maintain licensing deals with Apple for certain core technologies.
“They probably won’t ever have their own Apple model like Google or OpenAI,” Bajarin said. “They’re still going to run those services on iPhone, right? They want the iPhone to be the best place for developers to run their AI.”
Apple has been making its own system on a chip, or SoC, since the A series launched with the iPhone 4 in 2010. The latest generation A19 Pro has a new chip architecture that prioritizes AI workloads, adding neural accelerators to the GPU cores.
“We are building the best on-device AI capability that anyone else has,” Millet told CNBC. “Right now we are focused on making sure that these phones that we’re shipping today, or shipping soon, will be capable of all the important on-device AI workloads that are coming.”
Privacy is a major reason Apple is prioritizing on-device AI, but Millet said there’s another reason, too.
“It is efficient for us. It is responsive. We know that we are much more in control over the experience,” he said.
One “built-in AI” feature Millet highlighted is the new front camera that uses AI to detect a new face and automatically switches to taking a horizontal photo. “It’s leveraging a full complement of almost all the capabilities in the A19 Pro,” Millet said.
Apple’s original AI hardware, its Neural Engine, was first unveiled back in 2017. It was barely mentioned at the launch. Instead, it’s all about adding compute power to the GPUs.
“The integration of the neural processing is reaching MacBook Pro class performance inside an iPhone,” Millet said. “It’s a big, big step forward in ML compute. And so when you look inside the Neural Engine, for example, you have a lot of dense matrix math. We didn’t have that capability in our GPU. But now we do with A19 Pro.”
Bajarin told CNBC that Apple’s neural accelerators may work similarly to the tensor cores on Nvidia‘s AI chips, such as the H100.
“We’re integrating neural processing in a way that allows someone who’s writing a program to one of those small processors, extending the instruction set so they have a new class of computer that they have access to right there, and they can switch back and forth between 3D-rendering instructions and neural-processing instructions, all seamlessly inside the same microprogram,” Millet said.
Apple’s previous generation A19 SoC is in the base model iPhone 17, while the A19 Pro is in the iPhone Air, iPhone 17 and 17 Pro Max.
Apple’s iPhone 17 Pro shown on September 9, 2025 at Apple Park in California has enhanced 3D-rendering capabilities powered by Apple’s custom chip, A19 Pro, with neural accelerators added to the 6 GPU cores.
Katie Tarasov
Following overheating issues in the iPhone 15, a new “vapor chamber” in the Pro models keeps the custom chips cool.
“It’s actually positioned in concert with where the system on a chip, the A19 Pro is positioned,” said Kaiann Drance, Apple’s vice president of worldwide iPhone product marketing. “We think about how that all goes together, including with that forged unibody aluminum design, which is incredibly thermally conductive so that we can effectively dissipate heat with the vapor chamber, with where it’s positioned with our chip. And it’s even laser welded into it, which creates a metallic bond which also helps dissipate heat.”
More chips, more U.S. manufacturing
Apple still relies on others for smaller components, like Samsung for memory and Texas Instruments for analog chips. All bigger core chips, however, may be Apple-designed in every iPhone as soon as next year, according to Bajarin.
“We expect that there would be modems coming to Mac. We would expect there’s modems coming to iPad. There’s probably N variants of the networking chip coming to Mac,” Bajarin said. “I think over the course of the next few years, it will be on all of the portfolio.”
When CNBC asked Apple’s Millet if neural accelerators will be in the GPU cores of M5, the next anticipated SoC for Mac, he said, “We have a unified approach to architecture.”
The iPhone maker plans to manufacture at least some of its custom chips in the U.S., at facilities like Taiwan Semiconductor Manufacturing Company‘s new campus in Arizona, where CNBC got a tour of the first completed fab.
Apple’s A19 Pro is made at the leading edge of TSMC’s 3-nanometer node. While TSMC is workingtoward 3nm production in Arizona by 2028, it’s not there yet.
“If you need to be on the leading edge, it’s going to be Taiwan for the time being,” Bajarin said.
In August, Trump announced a 100% tariff on chips from companies not making domestically. That same day, Apple increased its U.S. spending commitment to $600 billion over the next four years. CEO Tim Cook said part of that will go toward creating an “end-to-end silicon supply chain right here in America.”
“There’s really a question of what part of tariffs impact the silicon supply chain,” Bajarin said. “This is obviously why Apple and Tim Cook are on their mission and out there talking about investing in America.”
As part of that plan, Bajain said Apple could give struggling U.S. chipmaker Intel “serious consideration if 14A really does deliver on all of its promises.” Although, he added, it’s “going to be awhile” before Intel “becomes a viable option.”
For now, Apple is committed to making chips at TSMC Arizona.
“We are super excited about TSMC’s push into U.S. manufacturing. Obviously it will help us from a time zone perspective, and we also appreciate that the diversity of the supply is also really important,” Millet said.
When asked if he knows how much of Apple’s $600 billion U.S. spend will go toward custom silicon, Millet said, “I hope it’s a lot.”
Watch the video to see a behind-the-scenes look at Apple’s latest custom silicon.
Sir Keir Starmer has announced the UK has officially recognised Palestine as a state.
“Today, to revive the hope of peace for the Palestinians and Israelis, and a two state solution, the United Kingdom formally recognises the State of Palestine,” the prime minister said on X, alongside a longer video statement.
“In the face of the growing horror in the Middle East, we are acting to keep alive the possibility of peace and a two-state solution.
“That means a safe and secure Israel alongside a viable Palestinian state. At the moment, we have neither.”
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Canada and Australia also officially recognised Palestinian statehood on Sunday, ahead of a conference of the UN General Assembly in New York this week.
It is a significant moment in the history of Britain’s involvement in the region, and comes as the death toll from the Israeli war on Gaza continues to rise and conditions for the people trapped become even more desperate.
Image: An updated map of the region the Foreign, Commonwealth & Development Office website
In recognising Palestine as a state, the UK does so based on 1967 borders to be finalised as part of future negotiations. It would be led by a “reformed Palestinian Authority”.
The UK also acknowledges “all legal rights and obligations of statehood” for Palestine.
An updated map on the UK’s Foreign, Commonwealth & Development Office website now has the West Bank and Gaza labelled as ‘Palestine’ rather than the ‘Occupied Palestinian Territories’. This change has been rolled out across the website.
Image: Protesters in Tel Aviv calling for the release of hostages. Pic: AP
Sir Keir calls on Hamas to release the hostages
The prime minister repeated his calls for the the Israeli hostages – held in captivity since the brutal attacks on Israel on 7 October, 2023 – to be released by Hamas.
“I have met British families of the hostages. I see the torture that they endure each and every day. Pain that strikes deep in people’s hearts across Israel and here in the United Kingdom.
“The hostages must be released immediately and we will keep fighting to bring them home.”
Sir Keir was also clear to emphasise that recognition of Palestine was “not a reward for Hamas”, saying that the terror group “can have no future, no role in government, no role in security” in a future state.
“I have directed work to sanction other Hamas figures in the coming weeks,” he added.
Image: Huge amounts of Gaza have been razed to the ground. Pic: Reuters
Starmer calls on Israel to end Gaza offensives
Sir Keir also repeated his criticism of Israel, which for nearly two years has waged a brutal war on the densely-populated Gaza Strip.
“The Israeli government’s relentless and increasing bombardment of Gaza, the offensive of recent weeks, the starvation and devastation are utterly intolerable.”
The death toll in Gaza since the IDF launched its offensive following the 7 October attacks has now risen above 65,000 people, according to Hamas-run health authorities.
“This death and destruction horrifies all of us. It must end,” he said.
Image: A pro-Palestinian march in London earlier this year. Pic: PA
British people ‘desperately want to see’ peace
Sir Keir also said: “Ordinary people, Israeli and Palestinian, deserve to live in peace. To try to rebuild their lives free from violence and suffering.
“That’s what the British people desperately want to see.”
But he warned that the possibility of a Palestinian state was in danger of vanishing forever.
“With the actions of Hamas, the Israeli government escalating the conflict, and settlement building being accelerated in the West Bank, the hope of a two-state solution is fading, but we cannot let that light go out.
“That is why we are building consensus with leaders in the region and beyond, around our framework for peace.”
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What changed in UK’s Gaza policy?
Sir Keir said this is a “practical plan” to bring people together behind a “common vision” that moves from a ceasefire in Gaza to negotiations on a two-state solution.
SpaceX has moved its next Starship spacecraft to the launch pad at Starbase, Texas, signaling preparations for Flight 11. This test flight will be the last mission of Starship Version 2, following Flight 10’s success with splashdowns and satellite deployment.