US consumer prices rise above expectations in October
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Inflation is running well above the US central bank’s 2% target. The US-Israeli war with Iran has boosted oil prices, combining with other factors to raise the cost of living.
PHOTO: REUTERS
WASHINGTON – US consumer prices increased more than expected in October, leaving the Federal Reserve on course to raise interest rates in December.
The Consumer Price Index (CPI) rose 0.4% in October after advancing 0.6% in September, the Labor Department’s Bureau of Labor Statistics (BLS) said on Nov 10. Economists polled by Reuters had forecast the CPI climbing 0.3% over the month.
The BLS did not publish year-over-year inflation readings because the 2025 federal government shutdown prevented the collection of consumer price data in October 2025, leaving no comparison base. Annual consumer inflation jumped 3.7% in September.
Inflation is running well above the US central bank’s 2% target. The US-Israeli war with Iran has boosted oil prices, combining with the import tariffs implemented by the Trump administration in 2025 to lift the cost of living.
High inflation contributed to the heavy losses suffered by President Donald Trump’s Republican Party in the midterm elections last week.
Excluding the volatile food and energy components, the CPI increased 0.3% in October after gaining 0.3% in September. The so-called core CPI was forecast to have climbed 0.2% in October.
The missing data from 2025 have no impact on the calculation of the Personal Consumption Expenditures Price Index readings that are tracked by the Fed to gauge progress toward its inflation target. Both measures are running above 3%.
Early on Nov 10, financial markets fully priced in a 25 basis points rate hike in December. The Fed left its benchmark overnight interest rate in the 3.75% to 4.00% range in November.
Economists said only a substantial sell-off on the equity markets or widening credit spreads would prevent the Fed from tightening monetary policy in December.
US stocks slumped last week after the Democrats’ sweeping victory fanned fears that new regulations could dent the durability of the AI trade. Stocks rallied on Nov 9 as oil prices fell. REUTERS