US Inflation Surges Beyond Expectations in October Despite Falling Fuel Prices

While gasoline prices have provided some relief, overall inflation remains stubbornly high, driven by persistent increases in shelter and food costs.

Published On 10 Nov 202610 Nov 2026

Consumer prices in the United States climbed in October at a pace faster than economists had forecast, even as gasoline prices retreated to a four-month low amid easing fears over the long-term economic fallout of the Strait of Hormuz closure.

In its latest report released on Tuesday, the U.S. Labor Department’s Bureau of Labor Statistics announced that the Consumer Price Index (CPI) for all items surged by 0.4% in October, marking a persistent inflationary trend since July. The agency also noted average increases in both shelter and food costs during the month.

The Labor Department’s figures significantly outpaced the expectations of the Federal Reserve Bank of Cleveland, which had projected a modest 0.2% increase, as well as economists polled by FactSet, who had anticipated a 0.3% rise, even in the face of declining energy prices.

On Monday, U.S. President Donald Trump suggested that further military action against Tehran is unlikely, stating that Iran is militarily neutralized. “We’re just keeping it the status quo, and we’re doing that really at the behest of countries that are their neighbors,” Trump remarked.

According to the American Automobile Association, the average price of a gallon of gasoline dropped below $4 ($1.06 per liter) for the first time since July. However, the current average price of $3.98 remains substantially higher than the $3.07 mark recorded a year prior. To put this in perspective, prices stood at $2.98 ($0.78 per liter) on February 28, the date when the U.S. and Israel initially engaged in strikes against Iran.

Economic stability and the rising cost of living dominated voter concerns during the midterm elections held on November 3, which resulted in Republicans losing their majority in both the U.S. House of Representatives and the Senate. A Reuters/Ipsos poll conducted on the eve of the elections revealed that 78% of voters deemed the cost of living to be either a highly important or the most critical issue influencing their ballots. The poll indicated that Democrats were favored by 43% of voters to handle the economy, compared to 32% who preferred Republicans.

Voter sentiment toward President Trump himself has also shifted largely negative in the wake of the conflict and its economic repercussions. According to the Reuters/Ipsos poll, only 32% of voters approved of his job performance, marking a slight one-percentage-point increase from his record low of 31% the previous month.

The Republican Party faced severe setbacks in the midterm elections, losing traditionally conservative strongholds in Congress, including key seats in states such as Texas and Kansas.

President Trump, alongside key administration figures such as Vice President JD Vance, has acknowledged that the military engagement in Iran contributed significantly to these electoral defeats.

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