US Consumer Prices Rise 0.4% in October as Core Inflation Holds at 0.3% for a Third Month

US consumer prices rose 0.4% in October after a 0.6% jump in September, the Bureau of Labor Statistics said on Tuesday 10 November. Energy added far less than a month earlier, but the underlying trend did not cool: prices excluding food and energy rose 0.3% for the third month running, the same pace as in August and September.

Markets read the report as firm. The 2-year Treasury yield, the maturity most sensitive to Federal Reserve expectations, closed at 4.73% against 4.56% the day before, according to the US Treasury's daily par yield curve. That leaves a December rate rise very much in play, with the Fed's next decision due on 9 December.

What the October report showed

Shelter rose 0.3% and accounted for more than 30% of the monthly increase in all items, the BLS said. Food was the surprise. After a flat September, the food index rose 0.5%, with groceries up 0.4% and meals away from home up 0.5%. Beef rose 0.9% and snacks 1.0%, while fruit, vegetables and dairy each gained 0.6%.

Energy rose 0.7% after 5.2% in September. Seasonally adjusted gasoline prices increased 1.0%, although before adjustment they fell 0.7%, which matches the steady slide in pump prices through October. Electricity rose 0.9% and natural gas fell 0.8%. So the fuel shock did not reverse in the official numbers; it simply stopped adding much.

There is one gap traders need to know about. The BLS did not collect survey data for October 2025 during the lapse in federal funding, so it cannot publish 12-month changes for October 2026 for most series. The usual annual inflation rate is missing from this release. For a few series it still exists: gasoline was 37.4% dearer than a year earlier before seasonal adjustment, and used cars were 3.3% cheaper.

Core inflation stays at 0.3%

Core inflation is where the Fed looks for price pressure that lasts, and October gave it nothing to relax about. Recreation rose 0.8%, motor vehicle insurance 0.7% and medical care 0.3%, led by a 0.8% rise in hospital services. Transportation services climbed 0.8%, faster than September's 0.6%.

Some lines did ease. Shelter slowed to 0.3% from 0.4%, owners' equivalent rent rose 0.3% and rent 0.2%, and hotel prices rose 0.6% after a 2.0% jump. Used cars and trucks fell 1.2%, one of the few major indexes to drop, and communication slipped 0.1%. Without the fall in used cars, core goods would have looked firmer too.

Goods prices outside food and energy rose 0.2% after 0.3% in September. New vehicles rose 0.2%, apparel 0.1% and medical care goods 0.5%, after a 0.7% fall a month earlier. Before seasonal adjustment the all-items index rose 0.2% to 337.511 (1982-84 = 100), and the chained CPI also rose 0.2%. Contracts and benefits linked to the CPI use those unadjusted index levels, but markets trade the seasonally adjusted monthly changes.

The result also beat the Cleveland Fed's nowcast, which had pointed to 0.24% for all items and 0.21% for core in its 9 November update. A model is not a forecast of record, but the gap shows how far the outcome landed above what the inflation trackers expected. As our CPI preview noted, a core reading of 0.3% or more was the case that keeps a December rise alive.

Why the Fed's December meeting is now live

The Federal Reserve held its target range at 3.75% to 4.00% on 28 October, with Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack voting for a quarter-point rise. Since then, payrolls rose 165,000 in October with pay up 0.4%, and core prices have now risen 0.3% three months in a row. Both pieces of evidence point the same way for the officials who wanted to move.

The calendar matters here. The BLS has scheduled November's CPI for Thursday 10 December, one day after the Fed decides. That makes October's report the last consumer price reading the committee will see before it votes, alongside November's jobs report. Officials who wanted more evidence before tightening now have one fewer data point to wait for.

Yields moved quickly. Besides the 2-year rise to 4.73%, its highest close since 21 October, the 10-year Treasury yield rose to 4.98% from 4.88%. The 10-year real yield, which strips out expected inflation using inflation-protected securities, climbed to 2.78% from 2.66%, its highest since 19 October. Higher real yields raise the cost of holding assets that pay no interest, which is why gold fell back.

How the dollar and gold reacted

EUR/USD's European Central Bank (ECB) reference rate was 1.1214 on Tuesday, but the ECB sets it at around 13:15 UTC, a quarter of an hour before the CPI release, so it shows the market before the data. It sat close to its 20-day average of 1.1198, inside a 20-day range of 1.1130 to 1.1267. Wednesday's reference rate will be the first to include the reaction.

Gold gave a clearer signal. Spot gold was $4,112.40 at 04:12 UTC on Tuesday and $4,045.60 at 03:03 UTC on Wednesday, according to gold-api.com, a fall of $66.80 or 1.6% across the release. Our gold and real yields report looks at that move in more detail.

Wednesday is Veterans Day, a US federal holiday, and the BLS has no releases scheduled. The next US inflation number is producer prices on Friday 13 November at 13:30 UTC. September's producer price index jumped 1.3%, so a second large rise would add to the pressure on the Fed.

The main October components

These are the seasonally adjusted monthly changes for the main CPI groups in September and October, from Table A of the BLS release. Energy explains almost all of the slowdown in the headline figure; food and transportation services went the other way.

What it means for traders

• Treat December as a live meeting. A third 0.3% core reading, strong payrolls and two dissents for a rise in October make a hike a real possibility, and the 2-year yield is the fastest gauge of how the market prices it.
• Expect more weight on Friday's producer prices and on Fed speeches between now and the blackout period before 9 December.
• Remember that annual inflation rates are missing this month. Some headlines will compare different measures, so stick to the monthly changes the BLS published.
• Watch real yields alongside gold. The 10-year real yield rose 12 basis points on Tuesday, and gold has tended to fall when real yields climb.
• Check our EUR/USD analysis and gold analysis for the levels we track, and the economic calendar for release times in your own zone.

Frequently asked

Sources: US Bureau of Labor Statistics: Consumer Price Index, October 2026 · US Treasury: daily par yield curve rates, November 2026 · US Treasury: daily real yield curve rates, November 2026 · Federal Reserve Bank of Cleveland: Inflation Nowcasting · ECB: euro foreign exchange reference rates