Prices rose slightly in October: BLS

Prices increased slightly from September to October, new data from the Bureau of Labor Statistics (BLS) showed Tuesday.

The consumer price index (CPI) increased 0.4 percent from September to October. But the BLS was unable to provide data on where overall prices stood relative to October 2025 because of the record-long government shutdown that took up that entire month.

The Federal Reserve Bank of Cleveland projected the CPI to tick up by 0.2 percent month over month and to be up 3.7 percent on an annual basis. Annual inflation in September was 3.7 percent , per the CPI.

Gas prices increased by 1 percent in October, after rising by 9.1 percent in September. Gas prices last month were up 37.4 percent relative to October 2025 — the BLS was able to provide annual pricing data for gas, new vehicles and used cars and trucks.

Prices at the pump have soared amid the Iran war , in its eight month.

A gallon of regular gas in the U.S. costs roughly $3.98 on average as of Tuesday, according to AAA . That is down nearly 40 cents from a month ago but up about 80 cents from a year ago.

Energy prices increased by 0.7 percent last month after rising by 5.2 percent in September.

The spillovers from the Iran conflict are not limited to gas prices, as a gallon of diesel is about $2.42 more expensive than what it cost a year ago, AAA reported.

High fuel costs contributed to Republicans losing control of both chambers of Congress to the Democrats in last week’s midterm elections .

While Decision Desk HQ has still not called some races across both chambers, The Hill’s partner projects the Democrats will hold a 259-176 edge in the House and a 55-45 advantage in the Senate.

“The October inflation report underscores why so many Americans voted the way they did in the mid-term elections,” Heather Long, chief economist at Navy Federal Credit Union, wrote Tuesday on the social platform X.

Long noted that inflation over the past year is “wiping out” annual wage gains of 3.1 percent.

President Trump, while acknowledging the political price his party has paid for the war’s impact on energy costs, has argued he would make the same decision if given the opportunity again.

“This, historically, for history, will go down as one of the best things we ever did,” Trump told reporters Sunday, adding that a nuclear-armed Iran would “blow up the world.”

Food prices also increased from September to October, rising by 0.5 percent. That marked the largest monthly rise in food prices since April, when they rose by 0.5 percent.

Core prices, which do not include more volatile food and energy costs, increased by 0.3 percent from September to October. Last month, core annual inflation was 2.6 percent.

Persistent inflation caused the Federal Reserve to tighten the screws on monetary policy in September, as officials raised interest rates by a quarter point for the first time since July 2023.

Federal Open Market Committee (FOMC) officials held rates steady in a divided 10-2 vote last month, with Fed Chair Kevin Warsh saying the move will allow central bankers to evaluate incoming data.

Traders on Tuesday are pricing in an 89.3 percent chance of the FOMC raising rates by another quarter point at the panel’s next meeting, set for Dec. 8-9, according to the CME FedWatch tool .

Fed board of governors member Christopher Waller said Tuesday he is “leaning” toward supporting a quarter-point hike in December, even if monthly inflation “improved” from September to October.

“But if the October CPI inflation data out later today are similar to the past two monthly readings — with core CPI inflation around 0.3 percent or even higher — then a stronger policy move may be needed,” Waller said at a Bank of England conference. “In that case, I believe a 50-basis-point hike in the policy rate should be considered at the December meeting.”

Traders are pricing in a 10.7 percent chance of the Fed hiking rates by 50 basis points next month, according to the FedWatch tool. FOMC officials last raised rates by a half point in December 2022, after inflation spiked to a 40-year high that year.

Seema Shah, the chief global strategist at Principal Asset Management, said Tuesday’s CPI report was a “warning shot” but did not “settle the argument for” a half-point hike next month.

“An outsized move should require evidence that inflation is accelerating decisively, expectations are becoming unanchored or the economy is overheating. We are not there yet,” she said in a note.