October Inflation Slows to 0.4% as Gasoline Prices Fall

Consumer prices rose 0.4% in October from a month earlier, the smallest monthly gain in three months, after a 0.6% increase in September, Bureau of Labor Statistics data showed. The slowdown offered some relief after high prices through most of the year, though overall prices continued to rise. Core inflation, which excludes food and energy, rose 0.3% from September. Economists had forecast a 0.3% gain in headline inflation and a 0.2% gain in core inflation. The Tuesday report did not include a year-earlier comparison. The October 2025 government shutdown forced the Bureau of Labor Statistics to cancel the October inflation report. Falling gasoline prices drove much of the October slowdown. Gasoline fell more than 5%, from $4.41 a gallon on Oct. 1 to $4.18 at the end of the month. AAA data released earlier Tuesday showed gasoline below $4 a gallon for the first time since July. Oil prices extended a recent sharp decline in early trading. Brent briefly traded below $90 a barrel, compared with a high of $118 on Oct. 30. Diesel prices remain 70% above the level at the start of the year, a much larger increase than gasoline. Diesel is a major cost for transportation companies delivering groceries and other goods to stores worldwide. Federal Reserve Gov. Christopher Waller discussed October inflation before the Tuesday data release at a central banking conference in London. Waller said even an improvement from September would leave him supporting a 25-basis-point increase at the December 8-9 interest-rate meeting. He described September inflation as bad, with no positive aspect. Annual inflation had accelerated to 3.7% in September. Waller said inflation substantially above his expectations could require stronger action from the Federal Open Market Committee. He said a core inflation increase of 0.3% or more should lead policymakers to consider a 50-basis-point increase in December. His suggestion of stronger action surprised investors. Waller argued that raising rates by only 25 basis points would endanger the credibility of the Federal Reserve. The Fed has not raised rates by 0.50% since 2022 and generally prefers successive 0.25% increases to assess the effects of higher rates. Inflation has remained above the Federal Reserve target of 2% since early 2021.