Inflation remained elevated in October, CPI report shows

Consumer prices rose more than economists expected in October on a monthly basis, offering little relief to Americans grappling with high living costs.

The Consumer Price Index, which tracks changes in prices over time, rose at a monthly pace of 0.4%, the Labor Department reported on Tuesday.

The Labor Department did not report a year-over-year inflation rate for October 2026 because the 2025 government shutdown left it without October 2025 consumer price data for comparison.

By the numbers

October’s monthly inflation increase cooled from September, when headline inflation rose 0.6% on a monthly basis. 

However, the figure was hotter than expected, with economists polled by FactSet predicting October prices would rise 0.3% month-over-month.

 The October inflation data is one of the first snapshots of the economy following the midterm elections, which underscored Americans’ frustration with high prices.

“Today’s CPI report suggests underlying inflation remains more persistent than the Fed would like,” said Andrew Davis, head of investment strategy at Bryn Mawr Trust, in an email. “While headline inflation moderated from September, core prices rose 0.3% for the third consecutive month, indicating that underlying price pressures have yet to meaningfully ease.”

While inflation in recent months has largely been driven by higher energy prices, October’s data shows that costs for other types of goods and products are also rising. Shelter costs, which rose 0.3% in October, accounted for more than 30% of the monthly all-items increase, the Labor Department said.

Food prices also accelerated, rising at a monthly pace of 0.5% last month after remaining flat in September, the data shows.

Energy prices

Energy costs, which have surged due to the Iran war, contributed less to the monthly rise in inflation than in past reports. Energy prices rose 0.7% in October, compared to 5.2% in September. 

Gas prices have been falling for weeks as stations switch to cheaper winter blend and people pull back from summer travel. 

Global oil costs, the main factor in setting prices at the pump, have also dipped amid hopes that the midterm elections could open the door to a deal between the U.S. and Iran to end the war.

On Tuesday, the national average prices for gasoline dipped below $4 a gallon for the first time in nearly four months, according to AAA.

Core inflation, which excludes volatile energy and food prices, rose 0.3% in October, in line with September but slightly above economists’ forecasts.

Josh Hirt, senior U.S. economist for Vanguard, said in an email that elevated energy prices have led to a “longer-lasting shock pass-through” to core inflation, prompting the investment company to raise its year-end 2026 core inflation forecast to 3.2%.