US inflation rose 0.4% in October as price increases cooled and gas costs dipped

US inflation rose 0.4% in October as price increases cooled and gas costs dipped New data comes after Republicans’ midterms losses – which were largely seen as a rebuke of the party over high prices

US inflation rose 0.4% from September to October, a cooldown in price increases as the cost of gas dipped during the month.

The Bureau of Labor Statistics did not release the usual year-over-year inflation figure as part of the consumer price index (CPI), which measures the price of a basket of goods and services, as data was not collected in October 2025 during the government shutdown.

Higher energy costs driven by the Iran war have been the main factor behind increased inflation, which has been above an annualized 3% since the war started in late February. In May, inflation reached 4.2%, a three-year high, before fluctuating between 3.4% and 3.7%.

Energy prices continued to rise slightly in October, though increases were not as high as they were in September. In September, the monthly change in CPI from August was 0.6%.

The new data comes after a midterm election that will give Democrats control of Congress, in what was largely seen as a rebuke of Republicans over high prices. In their postmortem of the midterms, Republicans, including JD Vance , have specifically pointed to frustration over increased gas prices as a reason why the party fared so poorly in the election.

While gas prices cooled slightly in October, dropping from an average of $4.41 a gallon at the beginning of the month to $4.22 a gallon, prices are still more than $1 a gallon higher than a year ago, according to AAA . The cost of diesel, which is used to power trucks, farming equipment, buses and trains, is nearly $2.50 a gallon higher compared with prices last year.

In September, the US Federal Reserve raised interest rates for the first time since 2023 and are expected to hike rates again at their next meeting in December. Higher interest rates slow the economy by making borrowing money more expensive, and can slow inflation. The Fed’s target inflation rate is 2%, which it considers a stable pace for price increases.

Growth in the labor market surpassed economists’ expectations in October, giving more room for the Fed to hike rates. The has been relatively steady, hovering just above 4%.