Consumer prices rose 0.4 percent in October on a seasonally adjusted basis, the Bureau of Labor Statistics reported on Tuesday, Nov. 10, above the 0.3 percent that economists polled by Dow Jones had expected, CNBC reported. The index rose 0.6 percent in September, and October was the third straight month with a gain of 0.4 percent or more, Reuters reported.

Core prices, which exclude food and energy, rose 0.3 percent in October against a forecast of 0.2 percent, after gains of 0.3 percent in both August and September, according to the BLS figures reported by CNBC.

No official annual rate

The BLS did not publish a 12-month inflation rate for October, because the government shutdown that ran from Oct. 1 to Nov. 12, 2025, kept the agency from collecting prices in October of last year, CNBC and Reuters reported. Some economists estimated on Tuesday that consumer prices rose 3.9 percent to 4.0 percent over the 12 months through October, with core prices up 2.8 percent, Reuters reported. Those are economists' estimates. The last annual rates the BLS published, for September, were 3.7 percent overall and 2.6 percent for core, according to Reuters.

In the 12 months ended June 2022, the consumer price index rose 9.1 percent, the largest 12-month increase since the period ending November 1981, according to the BLS. On those estimates, annual inflation is running roughly 5 percentage points below the June 2022 peak.

Where prices rose

Shelter costs rose 0.3 percent in October after 0.4 percent in September and accounted for more than 30 percent of the monthly increase, according to BLS data cited by CNBC. The energy index rose 0.7 percent, with gasoline up 1.0 percent after a 9.1 percent jump in September and electricity up 0.9 percent, while diesel rose 2.7 percent after an 11.9 percent increase in September, Reuters reported.

Food prices rose 0.5 percent in October, including 0.4 percent for groceries, while smartphone prices rose a record 1.4 percent and used cars and trucks fell 1.2 percent, Reuters and CNBC reported. Inflation-adjusted average weekly earnings fell again in October, according to Reuters.

Economists cited the Iran war and energy, tariffs, the buildout of artificial intelligence and housing, CNBC reported. "It's uncomfortably high," Mark Zandi of Moody's said. "It certainly makes it more likely we get another rate increase in December."

The Fed's December decision

Fed Governor Christopher Waller, in a speech in London on Tuesday before the report was released, said the Fed should raise rates in December and that "a stronger policy move may be needed," Reuters reported, and he said a half-point increase "should be considered" if core CPI came in around 0.3 percent, according to CNBC.

Dallas Fed President Lorie Logan said on Tuesday that she sees a need for two more quarter-point increases, adding, "After two more increases are in place, it would make sense in my view to pause," CNBC reported. Philadelphia Fed President Anna Paulson said on Tuesday, "For now, further gradual tightening seems appropriate," according to CNBC. Governor Michelle Bowman said, "There is still work to do to bring inflation closer to 2%," Yahoo Finance reported on Wednesday.

The Fed raised rates in September and held them at its October meeting by a 10-2 vote, leaving its benchmark range at 3.75 percent to 4 percent, CNBC and Reuters reported. Its next meeting is Dec. 8-9.

At Tuesday's close, CME FedWatch showed about a 90 percent chance of a quarter-point increase in December and a 10 percent chance of a half point, Kiplinger reported. CNBC put the odds of a half-point move at 13.6 percent on Tuesday evening, up from roughly zero before the report.

"The Fed seems to be falling behind the curve on inflation, and the October hold is looking like a policy mistake," Stephen Juneau of Bank of America said, according to Reuters. The October producer price index is due on Friday, Nov. 13, Reuters reported.