US monthly headline inflation slowed in October, while core prices rose 0.3% for a third consecutive month, matching the level Federal Reserve Governor Christopher Waller had linked to considering a 50-basis-point December rate hike.
The Bureau of Labor Statistics reported on Nov. 10 that consumer prices rose 0.4% from September on a seasonally adjusted basis, after a 0.6% increase in September. Core CPI, which excludes food and energy, rose 0.3%. The agency did not publish headline or core year-over-year rates.
Waller's pre-release condition
In prepared remarks earlier that day, before the release, Waller said core CPI around 0.3% or higher would warrant considering a 50-basis-point December hike if the report resembled the preceding two monthly readings. He had leaned toward 25 basis points under his expected outlook.
October's core reading matches that approximate level. The comparison does not establish Waller's assessment after the release or a decision by the Federal Open Market Committee. Waller's remarks explicitly state that the views are his own and do not necessarily represent colleagues on the Fed Board or the FOMC.
Components behind the headline figure
Prices continued to rise in October even as the overall monthly pace eased:
- Energy rose 0.7%, following a 5.2% increase in September.
- Food rose 0.5%.
- Shelter increased 0.3% and accounted for more than 30% of the monthly headline increase, according to BLS.
- Recreation rose 0.8% and motor vehicle insurance increased 0.7%.
- Used cars and trucks fell 1.2%.
The core result shows why the headline slowdown offers only part of the picture. Removing food and energy leaves the same 0.3% monthly increase recorded in August and September, with no corresponding improvement in that monthly measure.
Annual comparisons unavailable
BLS did not publish October year-over-year changes for headline or core CPI. During the 2025 lapse in appropriations, the agency did not collect October 2025 survey data, leaving most series without the prior-year indexes needed for an annual calculation.
Waller separately discussed personal consumption expenditures inflation, the measure targeted by the FOMC. The comparison with October's release concerns core CPI, and the two measures should not be treated as interchangeable.
The next test is policymakers' post-release assessment and subsequent inflation evidence ahead of December. BLS has scheduled November's CPI report for Dec. 10 at 8:30 a.m. Eastern.
