US Inflation Tops Forecast at 0.4% in October as December Fed Rise Looks Likelier

US consumer prices rose 0.4% in October, faster than the 0.3% analysts expected, according to the Bureau of Labor Statistics (BLS) and the BBC. The rise came a week after midterm elections fought over the cost of living, and it is smaller than September’s 0.6%.

The BBC says the above-forecast reading adds to the case for a Federal Reserve rate increase in December. It was the second month in a row in which the monthly rise was larger than 0.3%, after 0.6% in September. Fed governor Christopher Waller, speaking before the figures came out, said he leaned towards a rise even if October’s numbers had been slower.

Food, housing and the missing annual rate

Food rose 0.5% in the month. Food bought for the home rose 0.4% and meals eaten out rose 0.5%. Shelter, the largest part of the index, rose 0.3% after 0.4% in September, and BLS says it accounted for more than 30% of the monthly increase.

Core prices, which leave out food and energy, rose 0.3%, the same pace as in August and September. That makes three months in a row at that rate. Electricity rose 0.9% in October, although natural gas fell 0.8%.

BLS did not publish a 12-month rate for October. It did not collect data in October 2025 because of a lapse in appropriations, so it cannot calculate the usual comparison for indexes that lack that base month. The last annual figure was 3.7%, for the 12 months to September, the BBC reports. Households have no headline number for how much more they pay than a year ago, and that gap is a consequence of the earlier lapse in funding.

Chart: GoodBad. Data from the US Bureau of Labor Statistics, CPI release of 10 November 2026.

Energy cooled, but not prices

Energy rose 0.7% in October after a 5.2% jump in September. Gasoline rose 1.0% after seasonal adjustment, yet it fell 0.7% before adjustment. Seasonal adjustment smooths out the regular rises and falls of the calendar, so the two figures can point in different directions in a single month.

Slower growth is not a fall. As the BBC puts it, a slower rate of rise does not mean prices are going down. The September jump in energy is already in the index and is not reversed by a smaller October rise. Before adjustment, the all-items index rose 0.2% to 337.511 (1982–84 = 100).

BLS did not include real average hourly earnings in this release, so the CPI figures alone do not say whether pay kept pace. The index covers hundreds of everyday items, from fresh food and gasoline to medical services, and the bureau updates the basket as spending habits change.

What the report leaves out

Four things are missing from the release. There is no annual rate for October, as explained above. There is no real earnings figure, so a worker cannot tell from this release whether a 0.4% monthly rise outran their pay. There is no split of the rise between tariffs and other causes. And there is no forecast: the next monthly reading will show whether food and shelter keep rising at this pace.

Tariffs and who pays

The BBC notes that most of the extra global tariffs were struck down by the Supreme Court in February, and the president announced a new 10% global tariff at once. It cites New York Fed research finding that exporters cut their prices very little, so US-based businesses absorbed nearly 90% of the cost of the added tax.

The same research finds that each percentage point rise in average tariffs lifted consumer goods prices by nearly 0.25% after a year. That research looks at the past, and it does not say how much of October’s 0.4% came from tariffs. It does indicate that the cost reaches shoppers within a year.

The rate rise and the bills behind it

The Federal Reserve targets 2% annual inflation. The BBC explains that when prices rise too fast, the Fed tends to raise interest rates to encourage saving and discourage spending. That makes borrowing dearer for mortgage holders and businesses at the same time as groceries cost more. Many central banks consider inflation of about 2% or a little higher to be stable, the BBC notes, so the target is not zero. Neither of our sources says which way the Fed will go. The decision comes in December.

Households on fixed incomes have some protection. The Social Security Administration announced a 3.6% cost-of-living rise for 2027, worth an average of $75 a month, to about 72 million people from January. Increased payments for the 7.2 million people receiving supplemental security income begin on 31 December. The adjustment is tied to inflation, so it follows prices upward rather than getting ahead of them.

The BBC says the supply-chain problems of the pandemic and the oil surge after Russia’s invasion of Ukraine in 2022 helped push annual inflation to a peak of about 9%. The last published annual rate, 3.7%, is well below that and still well above the Fed’s 2% target. Energy has stopped pushing the index up as fast. Food, housing and core prices are what remain.