Consumer prices rose 0.4% in October, more than expected, complicating Fed's inflation fight

Costs for goods and services rose more than expected in October, providing fresh warning signs for the Federal Reserve in its fight to lower inflation.

The consumer price index, a broad gauge of costs across the U.S. economy, increased a seasonally adjusted 0.4% for the month, the Bureau of Labor Statistics reported Tuesday. Economists surveyed by Dow Jones had been looking for a 0.3% increase.

Stripping out volatile food and energy, so-called core CPI increased 0.3% against the forecast for a 0.2% gain.

The BLS did not estimate a yearly rate. The government shutdown last year prevented the bureau from collecting sufficient data in October 2025, so there is no comparable figure to use. However, the report did include annual figures for some individual items where it was able to collect data.

The report comes at a critical juncture for the Federal Reserve as it considers its next move regarding interest rates. At its October meeting, central bank officials voted 10-2 to keep their benchmark rate in a range between 3.75%-4% while awaiting incoming data.

Though gasoline prices have been falling in recent weeks, the energy index rose 0.7% and the gasoline index was up 1%. Food costs accelerated 0.5% while transportation services jumped 0.8%. New vehicle prices increased 0.2% but used cars and trucks fell 1.2%.

Apparel, a tariff-sensitive sector, rose just 0.1% though medical care commodities prices increased 0.5%. Shelter costs were higher by 0.3%. Airline fares accelerated 0.4%.