US CPI preview: 43-day shutdown leaves no official annual rate as monthly pace seen easing

With no official annual rate, the monthly core reading carries most of the weight. A 0.3% core print would revive hawkish Fed pricing for December, likely lifting Treasury yields and the dollar and adding pressure to tech stocks still fragile after last week’s selloff. A 0.2% or softer core reading would support the case for a pause and help extend Monday’s equity rebound. Estimated annual headline figures near 4% may still dominate early headlines, so there is a risk of a knee-jerk move that fades once traders focus on the monthly detail. Lower gasoline prices during October offer some relief on the energy side.-- The monthly numbers should show prices rising more slowly than in September, but the shutdown gap means the annual inflation rate everyone quotes will be an estimate this time.Summary:The BLS releases October CPI at 13:30 GMT (08:30 US Eastern time); consensus sees headline up about 0.3% m/m and core about 0.2%, after 0.6% and 0.3% in SeptemberLast year’s 43-day shutdown means there is no October 2025 index, so the BLS will not publish 12-month changes for headline or coreFactSet’s estimates imply headline inflation of about 4% y/y (from 3.7%) and core of about 2.8% (from 2.6%), but these are imputed, not officialAnalysts see risks to core tilted higher: shipping costs, reinstated tariffs, airfares and lodging, partly offset by softer owners’ equivalent rentIt is the final CPI before the Fed’s December meeting; the Fed held in October, and an in-line print would not rule out further tighteningUS consumer prices are expected to have risen at a slower monthly pace in October after a gasoline-driven jump in September. But Tuesday’s report will arrive with a notable gap: there will be no official annual inflation rate for either the headline or the core index.The Bureau of Labor Statistics releases the October CPI at 13:30 GMT (08:30 US Eastern time). Economists expect headline CPI to have risen about 0.3% on the month and core CPI, which strips out food and energy, about 0.2%, after gains of 0.6% and 0.3% in September. A smaller boost from gasoline, which fell during October, accounts for most of the expected slowdown in the headline figure. A real-time nowcast from the Cleveland Fed points to readings of about 0.2% for both measures.The missing piece is a legacy of last year’s 43-day government shutdown, which ran from October 1 to November 12, 2025. The BLS was unable to collect price data that month and never published an October 2025 CPI report. Without a year-ago index, the agency has said it will not publish 12-month changes for October 2026 where the October 2025 data are unavailable, which covers both the all-items and the core series.That leaves economists to impute last October’s levels and estimate annual inflation themselves. FactSet’s median estimates point to headline inflation of about 4% year on year, up from 3.7% in September, and core inflation of about 2.8%, up from 2.6%. Those figures rest on a small number of forecasts and on imputation choices that vary between firms. Any annual rate quoted after the release will be an estimate rather than an official reading.Analysts see the risks to core as tilted higher. Elevated shipping costs and reinstated tariffs could lift core goods prices, while airfares, lodging and recreation services may add pressure. A pullback in owners’ equivalent rent after unusual strength in September could offset some of that. Several forecasters note that monthly core readings below 0.15% have been rare since 2022.The release is the final CPI report before the Federal Reserve’s December meeting. The Fed held rates in October, and an in-line reading would leave inflation well above the 2% target without ruling out further tightening. With no official annual figures, the monthly core number is likely to drive the market reaction. This article was written by Eamonn Sheridan at investinglive.com.