US inflation is expected to ease in October after two months of sharp increases, according to economists surveyed by Bloomberg. The consumer price index (CPI) is projected to rise by 0.3%, down from a 0.6% increase in September, which was the largest since April. The core CPI, which excludes volatile food and energy prices, is also anticipated to cool, with a 0.2% increase, the smallest in three months. The Bureau of Labor Statistics will release the data on Tuesday, but it won’t provide year-over-year figures due to the federal government shutdown in October 2025.
Economists at Citigroup Inc. predict limited pass-through of high energy costs to goods prices and moderate services inflation. Bloomberg Economics expects headline CPI to slow to 0.25% in October, down from 0.65% in September, with both goods and services price gains driving the improvement. Used cars and consumer electronics, categories affected by the AI boom, saw slower inflation. Owners’ equivalent rent gains are also down a third from a September spike.
The October CPI report comes ahead of the Federal Reserve’s December meeting, where investors expect another interest rate hike. Economists will scrutinize the report for clues on inflation risks into early 2027. Meanwhile, Friday’s jobs report showed stronger-than-expected employment growth, which could sustain consumer spending and keep the Fed focused on inflation. The producer price index, due on Friday, is forecast to accelerate to 6.6% annually, the steepest increase in nearly four years.
Elsewhere, Canada’s September manufacturing and wholesale reports are expected to reflect a slowdown in third-quarter economic growth. Manufacturing sales likely rose just 0.1%, while wholesale sales, excluding petroleum, increased by 0.5%. The Bank of Canada will also release a summary of its rate hike deliberations. In Asia, China’s inflation data may show consumer price gains slowed to 0.8%, while factory-gate inflation is seen accelerating to 5.4%. Japan’s producer prices and India’s consumer-price data are also due, with the latter potentially showing inflation above 6% for the first time since August 2023.