October Inflation Slows as Gas Prices Fall

Prices continued to rise in October, but more slowly than in September, when inflation increased 0.6%. The latest monthly increase was 0.4%, while core inflation—which excludes food and energy—rose 0.3%. Both figures were higher than economists had expected: 0.3% for overall inflation and 0.2% for core prices.

The easing in energy prices, particularly gasoline, helped moderate the overall figure. Gas averaged $4.41 a gallon on October 1 and fell to $4.18 by October 31, a decline of more than 5%. Prices later dipped below $4 for the first time since July. Brent crude also fell below $90 in early trading, after reaching $118 on October 30.

Diesel has moved in the opposite direction over the longer term, rising 70% since the start of the year. It is a significant cost for the transport industry, which moves goods including groceries.

The report did not include a year-over-year inflation figure. The Bureau of Labor Statistics canceled its October 2025 report because of the government shutdown that month.

Federal Reserve governor Christopher Waller said before the release that he would support a quarter-point rate increase at the Fed’s December 8-9 meeting, even if inflation improved. He said a half-point increase should be considered if core inflation reached 0.3% or more. The Fed has not raised rates by half a point since 2022, and inflation has remained above its 2% target since early 2021.

Falling Gas Offers Relief as Fed Rate Hike Looms

October’s inflation increase slowed from September, and a sharp fall in gasoline prices helped bring some relief to consumers facing high costs. Overall prices rose 0.4%, while core inflation rose 0.3%—both above economists’ expectations, but below September’s 0.6% monthly increase.

Gas fell from $4.41 a gallon at the start of October to $4.18 on October 31, then dropped below $4. Brent crude also briefly slid below $90. Those declines matter in a report that otherwise shows prices are still rising, not falling.

Yet Fed governor Christopher Waller argued for keeping a steep increase in borrowing costs in consideration. He said he would support a quarter-point hike in December even if inflation improved, and that a half-point increase should be considered if core inflation reached 0.3% or more. The Fed has not made a half-point increase since 2022.

The figures invite caution about treating a single month’s inflation reading as a reason for sharper rate increases. Higher rates are the policy choice Waller is weighing, even as gasoline prices ease; diesel, meanwhile, is up 70% since the start of the year and remains a major transport cost. Inflation has not reached the Fed’s 2% target since early 2021. The report did not include a year-over-year figure because the agency canceled its October 2025 release during the government shutdown.

Inflation Still Runs Hot Despite October Gas Price Drop

The October report offers no basis for declaring victory over inflation. Prices rose 0.4%, more than economists expected, and core prices—which exclude food and energy—climbed 0.3%, also above forecasts. The overall increase slowed from September’s 0.6%, but prices are still moving up.

Lower gasoline prices helped restrain the monthly total. Gas fell from $4.41 a gallon on October 1 to $4.18 on October 31, and later went below $4. But a temporary energy reprieve does not erase the broader inflation pressure reflected in the core figure. Diesel is up 70% since the start of the year, adding costs for the transport industry that delivers goods.

Fed governor Christopher Waller made the stakes clear: he supports a quarter-point increase at the December meeting even if inflation improves, and said a half-point hike should be considered if core inflation is 0.3% or higher. The Fed has not raised rates by that much since 2022, but inflation has remained above its 2% target since early 2021.

The missing year-over-year figure limits what the report can show about inflation over a full year. The Bureau of Labor Statistics canceled its October 2025 release because of the government shutdown. For now, the headline monthly rate is still above expectations, and the latest figures do not show prices turning downward.