October CPI Preview: Inflation Expected to Cool, but the Report Will Carry an Unusual Gap
The most closely watched inflation report of autumn arrives on Tuesday morning, and it will look different from any recent consumer price release. The Bureau of Labor Statistics will publish October’s Consumer Price Index at 8:30 a.m. ET on Tuesday, November 10, and economists expect price growth to have slowed after two uncomfortably hot months. But for the first time, the report will carry no headline annual inflation rate at all.
That missing number is not a mistake. Last year’s federal government shutdown stopped the bureau collecting prices in October 2025, so with no October 2025 index to compare against, it will not publish 12-month changes for most of the index this month. Investors will have to read the report through its monthly figures instead.
What economists expect
The median projection in a Bloomberg survey sees headline CPI rising 0.3% in October, after a 0.6% rise in September, the largest since April. Core CPI, which strips out volatile food and energy prices, is expected to rise 0.2% — its smallest advance in three months.
Other forecasters agree. The Cleveland Fed’s nowcasting model puts headline inflation at 0.24% and core at 0.21% for the month, while RBC Economics expects both to rise 0.3%. Bloomberg Economics expects headline CPI to have slowed to 0.25% from 0.65% in September, and core to 0.24% from 0.33%.
September set a high bar: headline inflation rose 0.6% on the month and 3.7% over the year, driven largely by a 9.1% monthly surge in gasoline prices, while core rose 0.3% on the month and 2.6% over the year. Those September annual rates remain the last official year-over-year figures until the November report arrives in December.
Why gasoline matters this time
Energy is the main reason economists expect a cooler headline number. Retail gasoline prices eased through October, averaging around $4.31 a gallon against about $4.36 in September, after the sharp September spike. Analysts at UBS estimate energy’s contribution to headline inflation may have fallen from 0.39 percentage points in September to 0.04 in October.
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The more important question is core inflation, which reflects underlying pressure in services, housing and goods. Bloomberg Economics expects softer gains in both, with used cars and consumer electronics cooling and owners’ equivalent rent easing to about a third of its September spike. RBC, by contrast, warns that higher energy costs could spill over into core prices and that imported goods such as clothing and toys are getting dearer as tariff costs reach consumers.
Why the report matters for the Fed
Tuesday’s release is the last inflation reading the Federal Reserve will see before its December 8–9 meeting, at which investors widely expect a rate hike. Friday’s jobs report strengthened it: the economy added 165,000 nonfarm payrolls in October, well above forecasts of about 60,000, and unemployment fell to 4.1%.
After the jobs data, traders priced in roughly an 80% chance of a December hike, according to fed funds futures data cited by Reuters. A reading in line with forecasts would keep that hike on track; only a notably softer surprise, particularly in core inflation, would put it in doubt, analysts say.
The Fed technically sets policy using a different gauge, core PCE. But CPI is released weeks earlier and moves markets first, so Tuesday’s numbers will shape expectations well before that measure arrives.
What to watch at 8:30 a.m.
Three things deserve attention. First, the core monthly figure: with no annual rate to lean on, it becomes the most important line in the release. Second, the details on shelter and services, which have kept underlying inflation sticky. Third, any sign of tariff pass-through in imported goods, flagged by RBC and others as a risk for the months ahead.
The November CPI report follows on December 10, one day after the Fed announces its December decision — making Tuesday’s print the committee’s final full read on consumer prices before it votes.
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