October CPI Report Shows Inflation at a 0.4% Monthly Rate, Above Forecasts

The Bureau of Labor Statistics reported that the Consumer Price Index rose 0.4% month over month, above expectations, after rising 0.6% in September. Core inflation rose 0.3%, matching the September increase.

Economists had expected CPI to rise 0.2% on a monthly basis, according to the consensus estimates from FactSet. Core CPI was expected to come in up 0.2% on a monthly basis.

The Bureau of Labor Statistics did not publish an annual inflation rate for October because of the data disruption from last year’s government shutdown.

October CPI Inflation Report Highlights

• CPI rose 0.4% for the month after rising 0.6% in September.
• Core CPI rose 0.3% after rising by the same amount in September.

Food prices increased 0.5% in October after holding steady 0.0% in September. Grocery prices rose 0.4%, while restaurant prices increased 0.5%. Overall energy prices increased 0.7% after rising 5.2% last month, while utility gas prices fell 0.8%, fuel oil prices increased 2.0%, gasoline prices rose 1.0%, and electricity prices increased 0.9%. Shelter prices rose 0.3% in October after rising 0.4% in September.

What Is the CPI?

The Consumer Price Index is a mainstream measure of inflation that tracks changes in consumer prices for a wide variety of goods and services including food, housing, healthcare, and energy.

The CPI report is widely followed by investors, but it isn’t the only way to keep track of inflation. When it comes to the Federal Reserve’s decisions on interest rates, the focus is generally on the Personal Consumption Expenditures Price Index. The Fed targets a 2% inflation rate, but that is based on the PCE inflation index, not the CPI. However, the CPI generally makes front-page news because it is released earlier than the PCE and contains much of the same information. Both reports are released on a monthly cadence.