US consumer prices rise 0.4% in October, above forecasts, as core inflation holds at 0.3%
US consumer prices rose 0.4% in October, more than forecast in the last inflation report before the Federal Reserve meets in December.
The consumer price index (CPI) tracks what urban consumers pay for a basket of goods and services. The October gain was slower than September's 0.6%. But economists polled by Dow Jones had looked for 0.3%.
Core prices, which leave out food and energy, rose 0.3% against a forecast of 0.2%. That is the same pace as in August and September.
Housing costs did the most work. Shelter rose 0.3% and made up more than 30% of the overall increase. Elsewhere in the report:
- Food rose 0.5%, after no change in September.
- Energy rose 0.7%, after a 5.2% jump in September.
- Recreation rose 0.8% and motor vehicle insurance 0.7%.
- Used cars and trucks fell 1.2%.
Gas got cheaper at the pump in October. But the gasoline index still rose 1.0%, because it is adjusted for the seasonal pattern in fuel prices. Before that adjustment, gasoline fell 0.7%.
The report has no annual inflation rate. The agency did not collect prices in October 2025 during last year's government shutdown, so there is no base to compare October 2026 with. The last annual reading, for September, was 3.7%.
The core figure lands on the bar Fed Governor Christopher Waller set a few hours earlier. Speaking in London, he said a core reading "around 0.3 percent or even higher" would mean "a 50 basis point hike in the policy rate should be considered at the December meeting." He already leans toward a quarter-point increase.
Before the report, traders saw a better than 80% chance of a quarter-point hike in December, based on CME FedWatch data cited by CNBC.
The 2-year Treasury yield, which moves with rate expectations, was at 4.69% as of 9:03 a.m. ET. It closed at 4.55% on Monday.
Stock futures fell. S&P 500 futures were down 0.6% and Nasdaq 100 futures 1.1%.
The Fed meets on December 8-9. The November CPI report is due on December 10, the day after the decision.
Sources & Further Reading
- "Consumer Price Index – October 2026." U.S. Bureau of Labor Statistics. November 10, 2026.
- "Consumer prices rose 0.4% in October, more than expected, complicating Fed's inflation fight." CNBC. November 10, 2026.
- "Consumer Price Index – September 2026." U.S. Bureau of Labor Statistics. October 14, 2026.
- "The Economic Outlook and Some Thoughts on Labor Market Dynamism." Federal Reserve Board. November 10, 2026.
- "A key report for where inflation stood in October comes out Tuesday. Here's what to expect." CNBC. November 9, 2026.
This article was drafted with the help of AI. Kris Gunnars fact-checked, edited and published the article and is responsible for its accuracy and quality. How we use AI
