A shopper at a grocery store in Dayton, Ohio, Oct. 21, 2025.
Kyle Grillot | Bloomberg | Getty Images
The Bureau of Labor Statistics on Friday released its much-anticipated consumer price index report, delayed a week and a half because of the government shutdown.
Here are the five most important takeaways:
While inflation is still running well ahead of the Federal Reserve’s 2% goal, it’s showing no signs of runaway and in fact is easing, at least a bit, in some key areas. The headline gain of 0.3% monthly and 3% annually both were slightly below consensus forecasts. Same for core CPI excluding food and energy, which ran at 0.2% monthly and 3% annually.Markets continued to price in a near certainty for a Fed rate cut next week, and upped the odds for another in December, with just a 4% probability the central bank won’t ease two more times before the end of the year, according to the CME Group’s FedWatch.Aside from the headline numbers, the biggest watch point for markets was tariff and immigration impacts, which showed up — a little. Apparel prices rose 0.7% and sporting goods costs jumped 1%. But smartphone prices declined 2.2% and are down 14.9% year over year. Gardening and lawn care services, an immigration-related category, posted a 13.9% annual increase.Shelter costs are another key category, as they make up one-third of the weighting in the index. There was some relief on that front, with the index up just 0.2% monthly and holding at 3.6% annually. Owners equivalent rent, a critical component of shelter costs that asks homeowners what they could fetch in rent, rose just 0.1%, the smallest such move for the measure since November 2020.With government data collection and reports under suspension because of the shutdown, the BLS compiled this report only because of its role as a benchmark for Social Security cost-of-living adjustments. This, then, likely will be the last official data report released until the impasse is resolved.
What they’re saying:
“In aggregate today’s inflation readings are encouraging, albeit still above the Federal Reserve’s stated 2% inflation target. Yet, we think the overall inflation trend can continue to moderate over the next year … as inflation breakevens have recently suggested, allowing the Fed to maintain its bias toward rate cuts.”
— Rick Rieder, head of fixed income at BlackRock and a finalist to succeed Jerome Powell as Fed chair next year
“Look beneath the headline and what one sees on a year ago basis are large increases in the cost of food, meat, housing, and utilities. Middle class & down-market households experiencing a slowing pace of wage growth are clearly having difficulty adjusting to persisting increases in the cost of living … It’s only natural that those that inhibit the lower spur of the K ask: what is it that those celebrating a more modest increase in the pace of price increases see that indicates inflation is not eroding my bottom line & standard of living?”
— Joseph Brusuelas, chief economist at RSK, on the K-shaped economy
“Signs of spillovers from tariffs remain weak and support the view that tariff hikes will translate into a one-off bump in prices instead of persistent inflationary pressures.”
— Krishna Guha, head of global policy and central bank strategy at Evercore ISM
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