Consumer price index data for October showed inflation remained high, while costs rose for a wide range of essential goods and services, including food, rent and medical care.
The consumer price index rose 0.4% in October from the previous month, more than the 0.3% expected by economists but below September’s 0.6% gain, according to Labor Department data released Tuesday. “Core” inflation, which excludes volatile food and energy prices, rose 0.3%, beating the 0.2% economists expected to reach the September level.
The October report did not include annual inflation figures because the Bureau of Labor Statistics was unable to release full October 2025 data due to the government shutdown last year. But many economists believe inflation has accelerated year over year.
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Housing costs were a major contributor to the price rise in October. Owner’s equivalent rent, which measures homeownership costs, rose 0.3%, while rents rose 0.2%.
Food costs increased 0.5%, driven by higher prices for meat and dairy products. Lettuce prices increased by 7.3% and baby food prices by 5.1%.
Transportation costs rose 0.8% last month, while medical care items rose 0.5% and medical services rose 0.3%.
“There is hope that inflation will return to normal, but that is a hope at the moment, not a reality,” economist Justin Wolfers wrote on X.
Rising energy prices weighed heavily on the September reportbut October’s price increases were less spectacular. Energy costs rose 0.7% last month, compared to 5.2% in September.
“The October CPI is not great,” Kevin Gordon, head of macroeconomic research and strategy at the Schwab Center for Financial Research, wrote in an article on X.
“The magnitude of inflation still appears low for goods and services,” he wrote in another article, 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 its Dec. 8-9 meeting, although it will again look at inflation data via its preferred measure, the Personal Consumption Expenditures Index, later this month.
This burning report, coupled with a job market that is hold on and even showing signs of accelerating, cemented traders’ expectations for a December rate hike. Traders now see a 15.3% chance of a larger move of 50 basis points.
Claire Boston is a senior reporter for Yahoo Finance, covering housing, mortgages and home insurance.
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