October CPI: Consumer Prices Rose 0.4% in October, Hotter Than Expected, and This Year There Is No Annual Rate
The Bureau of Labor Statistics' October report came in above forecast on both the headline and the core — and, because last year's shutdown erased October 2025's data, it arrives with no year-over-year number at all.
WASHINGTON — U.S. consumer prices rose 0.4 percent in October, the Bureau of Labor Statistics reported Tuesday, down from September's 0.6 percent pace but above the 0.3 percent economists polled by Reuters had forecast. Core prices, excluding food and energy, rose 0.3 percent for a third straight month, against a 0.2 percent forecast and above the Cleveland Fed Nowcast's 0.21 percent projection.
The report carries an unusual hole in it: there is no annual inflation rate. The BLS did not publish year-over-year readings because the federal government shutdown in October 2025 prevented the collection of that month's price data, leaving nothing to compare against; the last annual figure, for September, was 3.7 percent, well above the Federal Reserve's 2 percent target. Shelter rose 0.3 percent and accounted for more than 30 percent of the monthly increase.
Inside the month, gasoline rose 1 percent — a far slower climb than September's 9.1 percent — and AAA put the national average at $3.98 a gallon on Nov. 10, down from $4.37 last month but up from $3.07 a year ago. Food at home rose 0.4 percent ahead of Thanksgiving, with beef up 0.9 percent and uncooked poultry, including turkey, up 1.9 percent; airline fares rose 0.4 percent, and health insurance costs fell 1.8 percent. Average hourly earnings rose 0.4 percent, keeping pace with the month's inflation.
Markets took the report as a rate hike confirmed. Stock futures fell, with Nasdaq futures down 1.4 percent and S&P 500 futures down 0.8 percent; the two-year Treasury yield rose 13 basis points to 4.68 percent, and gold fell 2 percent to $4,057 an ounce. Most traders tracked by CME FedWatch expect a quarter-point hike on Dec. 9, to a target range of 4 to 4.25 percent. Fed Governor Christopher Waller, speaking in London on Tuesday, said that if core inflation printed around 0.3 percent or higher, 'a 50-basis point hike in the policy rate should be considered at the December meeting.' Edward Jones economist James McCann called the report the last look at CPI inflation the Fed will get before that meeting, one that 'most likely seals the deal on a rate hike to close the year.'
