US consumer prices rise above expectations in October
US consumer prices rose 0.4% in October, exceeding forecasts, keeping the Federal Reserve on track to raise interest rates next month. The CPI increase was driven by oil prices linked to the US-Israeli war with Iran and Trump-era tariffs. Year-over-year data is unavailable due to the 2025 government
US consumer prices rose more than expected in October, keeping the Federal Reserve on course to raise interest rates next month, the Labor Department's Bureau of Labor Statistics (BLS) said on Tuesday (10 November).
The Consumer Price Index (CPI) increased 0.4 per cent last month after advancing 0.6 per cent in September. Economists polled by Reuters had forecast a 0.3 per cent monthly rise.
The BLS did not publish year-over-year inflation readings because last year's federal government shutdown prevented the collection of consumer price data in October 2025, leaving no comparison base. Annual consumer inflation stood at 3.7 per cent in September.
Inflation is running well above the US central bank's 2 per cent target. The US-Israeli war with Iran has boosted oil prices, combining with import tariffs implemented by the Trump administration last year to lift the cost of living. High inflation contributed to the heavy losses suffered by President Donald Trump's Republican Party in the midterm elections last week.
Excluding volatile food and energy components, the so-called core CPI increased 0.3 per cent last month after gaining 0.3 per cent in September. The core CPI was forecast to have climbed 0.2 per cent in October.
The missing data from last year have no impact on the calculation of the Personal Consumption Expenditures Price Index readings tracked by the Fed to gauge progress toward its inflation target. Both measures are running above 3 per cent.
Early on Tuesday, financial markets fully priced in a 25 basis points rate hike next month. The Fed left its benchmark overnight interest rate in the 3.75 per cent to 4.00 per cent range last month. Economists said only a substantial sell-off on equity markets or widening credit spreads would prevent the Fed from tightening monetary policy in December.