In yesterday’s data, the Consumer Price Index (CPI) increased by 0.4% in October, higher than expected. On an annual basis, it grew 3.9%. This was calculated using the average of September 2025 and November 2025 as the baseline, given that the October 2025 figure was not calculated during the government shutdown. The core rate, which excludes prices for food and energy, increased 0.3% in October, also higher than expected, and grew 2.8% on an annual basis, calculated as described above.
Looking at the individual categories, monthly prices for Electricity, up 0.9%, and Food, up 0.5%, were relatively strong, while monthly prices for Used Cars and Trucks, down -1.2%, were relatively weak. Prices for Shelter were up 0.3% in October, which was slightly less than the previous month’s increase.
Overall, it was a hot report on inflation, with the monthly figures for both the headline and core measures increasing more than expected. Prices for electricity and food increased, but that was offset somewhat by prices for used cars and trucks. Gasoline prices increased as well, but less than the previous month and prices for shelter declined slightly but are a bit above the average for the past six months.
Annualized measures of the core rate are still meaningfully above the Federal Reserve’s stated 2% target. Considering last week’s strong labor market report and recent comments from its members, the Fed is likely focused on tighter policy to help bring inflation down to its target. How resilient consumers remain through that process will be key for the economy and markets in the coming months.
In all, equity futures are higher this morning as we head into the market open while the bond market is closed in observance of Veterans Day.
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