Inflation higher than predicted in October

San José, CA – On Tuesday, November 10, the Bureau of Labor Statistics (BLS) released their report on consumer prices in October 2026. The report painted a picture of prices rising across the economy—at a faster pace than economists predicted—even though gasoline prices were almost unchanged in October, according to the American Automobile Association.

The report said that inflation for consumer goods and services rose 0.4% (or a 4.9% annual rate) in the month of October, faster than what economists had predicted. While no year-over-year rate was given because of the Federal government shutdown in October of 2025, the Wall Street Journal estimated that the rise in prices over the previous year was 4%. With wages up 3.1% over the last year, this is the seventh month in row this year that wages have lagged behind inflation.

While this year’s rise in inflation was triggered by the Trump administration and Israel’s war with Iran, causing oil, gasoline and diesel prices to soar, the latest report showed higher inflation spreading across goods and services. Housing costs were up 0.3% in October, food costs up 0.5%, energy up 0.7%, medical costs up 0.3%, and transportation up 0.8%.

One area with much higher inflation was high was televisions, with prices up 3.3% in one month, and smartphones, with prices up 1.7%. These prices were raised because of the rising costs of many of their components, which are being driven up because they are being bought up to build out data centers needed for the Artificial Intelligence boom.

One cost not directly included in the CPI is health insurance costs. These prices are expected to soar in January of 2027, with insurance premiums for people using the Affordable Care Act or ACA marketplace estimated to rise 15% next year. People who get their health insurance from their employers will see them go up 8-11%.

This report makes it all but certain the Federal Reserve will raise short-term interest rates at their next meeting in December. This will put pressure on mortgage interest rates, which are already at 7.3% for a standard thirty year mortgage. Interest rates are not included in the CPI, but these will add to households’ affordability crisis as home buying gets further out of reach.

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