Consumer Price Index data for October showed that inflation remains elevated, as costs rose across a wide range of essential goods and services, including food, rent, and medical care.
The Consumer Price Index rose 0.4% in October from a month earlier, higher than the 0.3% economists were expecting but below September’s 0.6% gain, according to Labor Department data released on Tuesday. “Core” inflation, which strips out volatile food and energy prices, rose 0.3%, coming in ahead of the 0.2% economists were expecting to match September’s level.
October’s report didn’t include annual inflation figures because the Bureau of Labor Statistics was unable to publish full October 2025 data due to the government shutdown last year. But many economists estimate that inflation accelerated on a year-over-year basis.
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Housing costs were a major contributor to October’s price increases. Owners’ equivalent rent, which measures homeownership costs, rose 0.3%, while rents were up 0.2%.
Food costs were up 0.5%, driven by higher meat and dairy prices. Lettuce prices rose 7.3%, and baby food jumped 5.1%.
Transportation costs accelerated 0.8% last month, while medical care items were up 0.5% and medical services rose 0.3%.
“One hopes inflation starts returning to normal, but that’s a hope right now, not a reality,” economist Justin Wolfers wrote on X.
Rising energy prices weighed heavily on September’s report, but October’s price increases were less dramatic. Energy costs rose 0.7% last month, down from 5.2% in September.
Read more: October inflation breakdown: Cheaper gas, bigger grocery bills
“CPI for October is not great,” Kevin Gordon, head of macro research and strategy at the Schwab Center for Financial Research, wrote in a post on X.
“Inflation breadth still looking poor across goods and services,” he wrote in another post, referring to the wide variety of categories in which prices are rising.
Tuesday’s inflation data is the Federal Reserve’s final look at the CPI before it meets Dec. 8-9, although it will get another look at inflation data via its preferred measure, the Personal Consumption Expenditures index, later this month.
The hot report, coupled with a labor market that’s holding up and even showing signs of accelerating, cemented traders’ expectations for a rate hike in December. Traders now see a 15.3% chance of a larger 50 basis point move.
Claire Boston is a senior reporter for Yahoo Finance covering housing, mortgages, and home insurance.
Source: finance.yahoo.com
