US consumer prices rose by 0.4pc in October from the prior month, a slower rate than in September as the surge in energy costs caused by the Mideast Gulf war moderates.
The monthly gain in the consumer price index (CPI) compared with a 0.6pc seasonally adjusted gain in September and a 0.4pc rise in August, according to the Bureau of Labor Statistics (BLS). Analysts surveyed by Trading Economics had forecast a median monthly gain of 0.3pc for October.
The BLS did not publish an annual headline inflation rate for October since the agency did not collect survey data in October 2025 due to the 43-day federal government shutdown. Annual CPI inflation was 3.7pc in September, and was last higher at 4.2pc in May.
So-called core prices, which strip out food and energy, rose by a monthly 0.3pc in October, the same pace as in September and August, and above a forecast of 0.2pc. Annual core inflation was 2.6pc in September.
The energy index rose by 0.7pc in October from the prior month, slowing sharply from a 5.2pc jump in September and a 2.1pc rise in August. Energy commodities rose by a monthly 0.8pc, after a 9.3pc gain the prior month, the BLS said.
Gasoline rose by 1pc in October, after a 9.1pc jump in September that accounted for over half of that month's headline gain. Gasoline was one of the few indexes for which the BLS published an annual rate, rising by 37.4pc from a year earlier, up from 34.2pc in September.
Shelter accounted for over 30pc of the monthly gain in the headline index, replacing gasoline, the BLS said.
War-driven rise
Inflation has been accelerating since the US-Israeli war on Iran broke out at the end of February, squeezing about a fifth of seaborne energy flows that transit through the strait of Hormuz.
Because of the war and its inflationary spiral, US president Donald Trump's Republican party was handed a stinging defeat in nationwide midterm elections last week, losing control of both houses of Congress and effectively rendering Trump a so-called "lame duck" president for the remaining two years of his term.
Following the release of the BLS report, the CME FedWatch tool showed an 85pc probability the Federal Reserve would hike its target rate by a quarter point at its next meeting ending 9 December, up from 84pc on Monday. FedWatch showed 10pc odds of a half point hike, compared with none a day earlier. The Fed raised its rate by a quarter point at its meeting in September, the first increase since 2023.
