US consumer prices rose 0.4% in October, the Bureau of Labor Statistics reported at 8:30 a.m. ET on Tuesday, in the last big inflation test before the Federal Reserve decides on interest rates in December. Core inflation, which strips out food and energy, rose 0.3% on the month. Both figures came in hotter than economists expected: the consensus looked for a 0.3% rise in headline prices and a 0.2% rise in core.
October’s 0.4% headline rise was slower than September’s 0.6% jump, but core inflation held at 0.3%, matching its pace in September and August. Shelter rose 0.3% in October and accounted for more than 30% of the month’s increase, according to the BLS. Food prices rose 0.5% in the month, while energy rose 0.7% after September’s 5.2% surge; petrol prices rose 1.0% in October after jumping 9.1% in September.
One number is missing from the report: an official annual inflation rate. BLS said it cannot publish 12-month percentage changes for October 2026 because it did not collect price data for October 2025, during the federal government shutdown that ran from 1 October to 12 November 2025. No official year-over-year rate was published for October, so the monthly figures are the only official guide to where inflation stands.
What September showed
September set a high bar. Headline consumer inflation rose 0.6% on a seasonally adjusted basis in September, with the 12-month rate at 3.7%, according to the Bureau of Labor Statistics figures reported at the time. Core inflation was 2.6% higher than a year earlier in that release, and petrol prices were a major driver, rising 9.1% in the month.
October’s figures cut both ways. The headline pace cooled from September’s energy-driven surge, but core inflation did not cool at all — and its 0.3% rise landed exactly on the threshold a senior Fed official had set for a bigger December move.
Why the Fed is watching
The Federal Reserve held its target rate at 3.75% to 4% on 28 October, in a 10-2 vote, with two officials dissenting in favour of a rise. Its next meeting is on 8-9 December. Governor Christopher Waller said in London on Tuesday, before the figures were released, that he leans towards a quarter-point rise in December, and that a half-point move should be considered if core prices rise by about 0.3% or more. Core rose exactly 0.3% in October, so the condition Waller set has now been met.
The jobs market has already tilted the debate towards tightening. Employers added 165,000 jobs in October, well above expectations, and unemployment edged down to 4.1%, according to the Bureau of Labor Statistics. That strength gives the Fed room to act on inflation without fearing an immediate jobs collapse.
Markets react
Stock futures fell after the report, according to CNBC. Futures tied to the S&P 500 traded down 0.5%, Nasdaq-100 futures slipped 1.2%, while futures linked to the Dow Jones Industrial Average were around the flatline. The hotter-than-expected figures put the focus squarely on the Fed’s December meeting.
What to watch next
Beyond the headline, watch core services, shelter and energy in the next release. For borrowers, the stakes are direct: mortgage rates have been above 7%, and a December rate rise would keep borrowing costs high. Producer prices follow on Friday 13 November, completing the week’s inflation picture.
Sources: Bureau of Labor Statistics, 10 November 2026; CNBC, 10 November 2026
