U.S. consumer prices are expected to rise at a slower monthly pace in October, following a jump in gasoline prices in September. However, Tuesday's (November 10th) report will have a significant gap: neither the overall nor the core CPI will show official annualized rates. The Bureau of Labor Statistics will release the October CPI at 9:30 PM Beijing time. Economists expect the overall CPI to rise by about 0.3% month-over-month, and the core CPI, excluding food and energy, to rise by about 0.2%, compared to 0.6% and 0.3% respectively in September. The expected slowdown is mainly attributed to the decline in gasoline prices in October, which reduced its contribution to the overall increase. The Cleveland Fed's real-time nowcast points to both indicators at around 0.2%.

Data gap: The 43-day shutdown resulted in the lack of an official annual rate, which can only be estimated.

The missing piece is a legacy of last year's 43-day government shutdown—which lasts from October 1 to November 12, 2025. The Bureau of Labor Statistics was unable to collect price data that month and never released a CPI report for October 2025. Without an index from a year prior, the agency stated it would not release the 12-month change for October 2026, covering both the overall and core series, given the missing October 2025 data. This forces economists to extrapolate last October's levels and estimate annual inflation themselves. FactSet's median estimate points to overall inflation of approximately 4% year-over-year, up from 3.7% in September, and core inflation of approximately 2.8%, up from 2.6%. These figures are based on a few forecasts and different extrapolation choices from various agencies. Any annual rates cited after release will be estimates, not official readings. The implication of this gap is that the market lacks an authoritative annual rate anchor, and pricing will rely more heavily on the reliability of monthly readings and extrapolations.

Key risks: Shipping costs, reinstated tariffs, and airfares and accommodations pose upward pressure.

Analysts believe core risks are skewed to the upside. High shipping costs and reinstated tariffs could push up core commodity prices, while airfares, accommodation, and leisure services could add pressure. The unusually strong landlord-equivalent rent decline in September may offset some of the pressure. Several forecasters point out that monthly core yield readings below 0.15% are extremely rare since 2022. This implies that a monthly core yield reading of 0.3% would be considered a hawkish signal; 0.2% or less would support the rationale for a pause.

Market Implications: Monthly core readings dominate the market reaction; annualized rate estimates may trigger a brief knee-jerk reaction.

This is the last CPI report before the Fed's December meeting. The Fed kept interest rates unchanged in October, and the expected reading will keep inflation well above the 2% target, but further tightening cannot be ruled out. Without an official annual rate, the monthly core figure is likely to dominate market reaction. A core reading of 0.3% would reignite hawkish pricing in a December rate hike, potentially pushing up Treasury yields and the dollar, and putting pressure on tech stocks, which remain vulnerable after last week's sell-off; a core reading of 0.2% or less would support the case for a pause and help extend Monday's stock market rally. An estimated overall annual rate close to 4% is likely to dominate early headlines, so there is a risk that the knee-jerk reaction will subside once traders turn to the monthly details. The decline in gasoline prices in October provided some relief on the energy side.

Editor's Summary

The October CPI report was released against the backdrop of the lack of an official annual rate, so the market will focus heavily on the monthly core inflation reading. A decline in gasoline prices is expected to lead to an overall slowdown, but shipping costs, rising tariffs, and prices for some services still pose upside risks. A core month-on-month reading of around 0.2% supports a policy stance of remaining on hold, while 0.3% could reinforce expectations of further tightening in December. The projected annual rate of nearly 4% reminds us that inflation is still significantly away from the 2% target, and the final policy path will require a comprehensive assessment based on subsequent employment and price data.

Frequently Asked Questions

Q: Why won't there be an official year-on-year CPI rate for October? A: Due to the US federal government shutdown from October 1st to November 12th, 2025, the Bureau of Labor Statistics was unable to collect price data for that month and has never released a CPI report for October 2025. Without an index from a year ago as a basis for comparison, the agency decided not to release official 12-month change rates for overall and core CPI in October 2026. The market can only use annual rates calculated by various institutions themselves; these figures are based on different interpolation assumptions about the missing data and are not official statistics. Q: What is the consensus among economists regarding the month-on-month increase in October? A: Most surveys indicate that the overall CPI is expected to rise by about 0.3% month-on-month, and the core CPI by about 0.2%, both lower than September's 0.6% and 0.3%, respectively. The Cleveland Fed's nowcast estimate is 0.24% for overall and 0.21% for core. The significant decline in gasoline prices in October is the main reason for the expected slowdown, offsetting some of the upward pressure from other items. Q: Where do the main upside risks to core inflation come from? A: Analysts point out that persistently high shipping costs and the reinstatement of tariffs could push up core commodity prices. There is also potential for increases in airfares, accommodation, and leisure services. A decline in landlord-equivalent rents from their unusually high levels in September could provide a hedge. Historically, monthly core readings have rarely fallen below 0.15%, so a 0.3% core month-on-month change would be considered a hawkish signal. Q: What impact will this report have on the Fed's December meeting? A: This is the last major CPI data release before the December policy meeting. The expected reading shows inflation remains well above the 2% target, but the monthly slowdown may support continuing to hold rates steady. A core month-on-month change of 0.3% could increase the probability of a December rate hike; 0.2% or lower would help solidify the pause stance. Market reactions will heavily depend on the core monthly figure, rather than the missing official annual rate. Q: What is the estimated annual rate? How will the market use it? A: FactSet's median estimate for overall year-on-year growth is approximately 4.0%, while some institutions project core year-on-year growth at around 2.7%-2.8%, both higher than the official September reading. Due to differing methodologies, the figures vary among institutions. Traders may initially react with a knee-jerk reaction to the near 4% overall projected annual rate, but will quickly turn to monthly details and core readings to assess the true momentum of inflation and the policy path.