The Bureau of Labor Statistics is scheduled to release the October Consumer Price Index on Tuesday at 8:30 a.m. Eastern, giving markets a fresh test of inflation expectations ahead of the Federal Reserve’s December rate decision. Forecasts point to slower monthly increases than in September, but the report will not include an annual comparison.
Forecasts point to a modest slowdown
The CPI for all items is expected to rise 0.3% in October, while core CPI—which excludes food and energy—is forecast to increase 0.2%. Those monthly gains would be below September’s increases of 0.6% and 0.3%, respectively, but would still indicate that prices are rising.
Gasoline prices offered some relief during October, falling by more than 4%, according to the Energy Information Administration. That decline followed a surge that had added more than a dollar a gallon over the past year. The expected CPI figures suggest cheaper fuel may not be enough to produce a broad easing in consumer prices.
No annual CPI comparison this month
The October release will not provide a year-over-year inflation reading. A government shutdown in October 2025 prevented the Bureau of Labor Statistics from collecting some data and compiling a complete index level, leaving no comparable figure for this report.
Bank of America estimated annual inflation at 3.8% for headline CPI and 2.7% for core CPI by interpolating data for the period last year. Those are estimates rather than official year-over-year readings; both would be 0.1 percentage point above September and above the Federal Reserve’s 2% goal.
Fed officials are watching broader price pressures
Falling energy costs contrast with concerns among Federal Reserve officials that inflation is persisting in other parts of the economy. Chicago Fed President Austan Goolsbee said Monday that affordability and business costs were prominent concerns in conversations across his district. He linked the inflation challenge to prices beyond the sectors directly affected by tariffs and the Iran war.
Goolsbee also pointed to demand associated with artificial-intelligence data-centre construction. Building those facilities requires construction workers, electricity and equipment, adding demand that could put pressure on prices. The investment may support productivity over time, but its near-term effect on costs is a concern for policymakers.
December rate decision is in focus
The Federal Reserve held its benchmark interest rate steady in October. Markets are pricing in a better than 80% probability of a quarter-percentage-point increase at the next meeting in December, according to CME FedWatch data. Goolsbee did not say whether he supports another increase, but warned that allowing the economy to overheat could make inflation harder to bring down.
The CPI report arrives as economic growth remains strong: gross domestic product expanded 3.4% in the third quarter, and the Atlanta Fed was tracking growth of 3.5% for the final three months of the year. October payrolls increased by 165,000, while the unemployment rate edged down to 4.1%. Inflation-adjusted wage growth was negative.
Bank of America sees tariff effects fading but has flagged possible pressure on goods from AI-related demand, alongside persistent services prices and costs in health insurance and autos. The October CPI release is the final inflation report before the Federal Reserve’s December 8–9 meeting; the rate decision remains pending.
Sources
- E8 Markets Blog — “U.S. Inflation Data Could Set the Tone for the Fed’s December Decision”
- Kiplinger — “October CPI Report: What the Inflation Data Is Expected to Show”
- finance.yahoo.com — “Week ahead: US stocks face inflation test as AI uncertainty keeps investors on edge”
- MarketPulse by OANDA Group — “Get ready for CPI – US Inflation Preview”
- clevelandfed.org — “Inflation Nowcasting”