Prices up 0.4% in October; shutdown wiped out annual inflation rate

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(The Center Square) – Consumer prices rose 0.4% in October, the Bureau of Labor Statistics reported Tuesday, but the agency could not say how much prices have risen over the past year because last year's government shutdown erased the comparison.

The agency collected no price data in October 2025 during the shutdown, leaving no year-ago figure for most of the index, BLS said. Economists can still estimate one. Heather Long, chief economist at Navy Federal Credit Union, calculated that prices rose about 4% over the past year. Average hourly earnings rose 3.1% over the same period, BLS reported in its October jobs report, a figure the agency could publish because it comes from payroll records rather than price collection.

"Inflation is running at about a 4% pace in the past year, wiping out all wage growth for the typical worker," Long told The Center Square.

Long derived the figure by estimating the missing October 2025 index from the months on either side, putting inflation at 4%. She also compared October against the last month BLS actually measured, September 2025, which yields 3.9%.

Orphe Divounguy, economist for The Center Square, put the pace of the past three months, projected out over a full year, at about 5.7%, and core prices, which exclude food and energy, at 3.7% on the same basis. None of these is an official rate.

BLS said contracts and other agreements that adjust against a specific CPI month have no October figure to use this year. Where a contract needs the missing number, the agency told The Center Square, the two sides can agree to estimate it by averaging the months on either side. That is the method Long used to arrive at her 4% estimate.

The 10-year Treasury note rose to 4.98% on Tuesday from 4.88% a day earlier, and the 2-year climbed to 4.73% from 4.56%, according to Treasury Department data.

Carolyn Bourdeaux, executive director of Concord Action and The Concord Coalition, said bondholders are demanding more to hold Treasuries because they expect the Fed to raise rates.

A quarter-point rise in interest rates that holds would add about $30 billion to federal interest costs in 2027 and about $900 billion over the next decade, according to the Congressional Budget Office's interactive budget tool. Bourdeaux told The Center Square the figures are an estimate, noting Fed moves do not translate one for one into Treasury yields.

Not every CPI-linked payment is affected. Social Security's 3.6% cost-of-living adjustment for 2027 is already set, the Social Security Administration said, because it is calculated from third-quarter CPI-W and does not require an October reading.

BLS told The Center Square it was able to publish 12-month changes for a handful of series that draw on nonsurvey data, which the agency retroactively acquired for October 2025. Over the past 12 months, gasoline prices rose 37.4%, new vehicles 0.7%, and used cars and trucks fell 3.3%, according to the CPI release.

Prices rose across most of the index. Beef rose 0.9% over the month and snacks 1%, while electricity climbed 0.9%. Hospital services rose 0.8%, motor vehicle insurance 0.7% and recreation 0.8%. Used cars and trucks, down 1.2% for the month, were among the few categories that fell, all according to the CPI release.

The next inflation report, covering November, is scheduled for Dec. 10, BLS said. The missing October 2025 data will not affect 12-month comparisons in future months, the agency said.