US consumer prices rise 0.4% in October, beating forecasts and locking in bets on a December Fed rate hike
Headline CPI rose 0.4% and core CPI 0.3%, both above economists’ forecasts; the BLS published no annual rate because of last year’s shutdown.
US consumer prices rose more than expected in October, the Bureau of Labor Statistics reported on Tuesday, 10 November. The Consumer Price Index climbed 0.4% from September, after a 0.6% rise the month before; economists polled by Reuters had expected 0.3%. Excluding food and energy, core CPI rose 0.3% for a third straight month, versus a 0.2% forecast.
What drove it
According to CNBC, food prices rose 0.5% (beef +0.9%), the energy index rose 0.7% and transportation services jumped 0.8%. Shelter rose 0.3% and accounted for more than 30% of the headline increase. Used car prices fell 1.2%, and tariff-sensitive apparel rose just 0.1%.
No annual figure
The BLS did not publish a year-over-year rate because last year’s federal government shutdown prevented price collection in October 2025. Annual inflation was 3.7% in September; before the release, economists surveyed by Reuters had estimated October at around 3.9%.
The Fed
Reuters reported that the data cemented expectations that the Federal Reserve will raise interest rates in December. Fed Governor Christopher Waller had said beforehand that a 0.3% core reading would lead him to consider a 50-basis-point hike. Futures markets now price a quarter-point move in December as essentially certain, with roughly a 10% chance of a half-point increase.
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