Inflation report finds prices rose faster than expected before midterms

Loading video...

Hugh Cameron

By Hugh Cameron

Reporter

See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.

Price increases did not slow as much as was anticipated in October, according to the latest inflation report from the Department of Labor, with energy and several other consumer costs continuing to drive elevated inflation ahead of the midterm elections.

According to Tuesday’s report from the Bureau of Labor Statistics, consumer prices rose 0.4 percent in October. Ahead of the release, the consensus among analysts had been only a 0.3 percent increase in the Consumer Price Index (CPI).

The latest report follows a fuel-driven 0.6 percent gain in September.

Read More on News

Missing from the report is the annual rate. The government shutdown which took place last year interrupted the agency’s data gathering efforts, meaning it had no October report to use for comparison for the 12-month rate.

Stripping out food and energy, core inflation hit 0.3 percent in October, in line with September but slightly faster than the 0.2 percent forecasts.

Tuesday’s report was the first comprehensive look at consumer prices since the midterms, in which Democrats won both the House and Senate in large part due to inflationary concerns and the rising cost of living.

A shopper looks for items in a grocery store on October 14, 2026 in Miami, Florida.

...

And the report was also significant in its implications for monetary policy and the Federal Reserve’s rate outlook. The central bank kept interest rates steady in late October following a quarter-basis-point hike in September, with analysts now parsing economic data and policymaker remarks for hints as to its calculus ahead of the December meeting.

“Markets are benefiting from an improvement in the geopolitical outlook, but the underlying macroeconomic and corporate risks remain unresolved. Lower energy prices could help ease inflation expectations, but the Fed will need evidence of broader disinflation before reconsidering its policy stance,” Daniela Hathorn, senior market analyst at Capital.com, wrote in a note shared ahead of the release.

The inflation data follows a better-than-expected jobs report from the BLS, which showed that the economy added 165,000 in October compared to consensus forecasts of only 65,000.

“The key question is whether today's inflation figures support the recovery or remind investors that resilient economic growth and persistent price pressures could keep borrowing costs elevated for longer,” Hathorn wrote.