Wireless price surge lifts core CPI, likely seals Fed rate hike

September 11, 2026 at 08:43 PM2 min

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A record 5.9% jump in wireless telephone services prices pushed the core consumer price index up 0.3% in August, above the 0.2% forecast. The surge added about a tenth of a percentage point to the core reading, likely cementing a Federal Reserve interest-rate increase next week. Economists at Bank of America, Barclays and Pantheon Macroeconomics linked the jump to recent plan changes by AT&T and T-Mobile.

Key Facts

The core consumer price index rose 0.3% in August from July, exceeding the 0.2% median estimate in a Bloomberg survey.
Wireless telephone services prices surged 5.9% in August, adding about a tenth of a percentage point to the core CPI reading.
AT&T implemented price increases on certain plans in August, and T-Mobile retired some legacy plans, resulting in higher consumer prices.
Omair Sharif, president of Inflation Insights LLC, said the Fed will not have the luxury of slicing and dicing the data at next week's meeting.

Wireless Price Surge

The 5.9% surge in wireless telephone services prices alone added about a tenth of a percentage point to the core CPI reading. That gauge largely reflects prepaid and monthly plans offered by cellular carriers. Economists at Bank of America Corp., Barclays Plc and Pantheon Macroeconomics flagged recent plan changes by major carriers like AT&T Inc. and T-Mobile US Inc. as likely culprits. The Bureau of Labor Statistics declined to elaborate on how the changes at those carriers may have impacted the number.

Carrier Plan Changes

AT&T said earlier this year that it would implement price increases on certain plans in August. T-Mobile also recently retired some of its legacy plans, resulting in price increases for consumers. Even so, many Fed-watchers still saw a case for raising interest rates, even if underlying inflation was lifted last month partly by one-time factors.

Fed Rate Outlook

The stronger-than-expected core CPI reading likely sealed the deal for a Federal Reserve interest-rate increase next week. Omair Sharif, president of Inflation Insights LLC, said in a note that the Fed will not have the luxury of slicing and dicing the data at the meeting next week. Sharif noted that while the wireless index added 10 basis points to core CPI, the core ex-wireless would have been 0.20%.