US October core CPI rose 0.3% month-on-month, exceeding expectations for 3 consecutive months

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US October core CPI exceeded expectations for 3 consecutive months; energy, services, and AI costs increase pressure for rate hikes

BlockBeats news, November 12: US October inflation data released multiple warning signs. Data shows that core CPI rose 0.3% month-on-month, above the market expectation of 0.2%, exceeding expectations for the third consecutive month; headline CPI rose 0.4% month-on-month, also above expectations. The impact of rising energy prices is spreading to food, transportation, and other sectors, while services inflation also remains firm, further increasing the difficulty for the Federal Reserve to control inflation.

Specifically, US October food prices rose 0.5% month-on-month, with grocery prices posting the largest monthly increase since April; intracity transportation services prices recorded the largest monthly increase since 2020, and airfare and delivery services prices also rose. In addition, services prices excluding energy and housing rents rose 0.4% month-on-month, and owners' equivalent rent rose 0.3%.

AI investment is bringing new cost pressures. Over the past 3 months, US computer and peripheral equipment prices rose at an annualized rate of 25%, and October electricity prices rose 0.9% month-on-month, the largest increase in 6 months. Morgan Stanley estimates that AI-related factors have contributed about 6 basis points to core CPI so far this year; the impact is still relatively limited at present, but as data center investment expands, related pressures may rise further.

On monetary policy, Chicago Fed President Goolsbee described the latest inflation data as close to disturbing. Fed Governor Waller previously said that if core CPI rises 0.3% or more month-on-month, the December meeting should consider a 50 basis point rate hike. Goldman Sachs has incorporated another 25 basis point rate hike in March 2027 into its forecast, and expects the federal funds rate target range to rise to 4.25% to 4.50% by then. However, some economists warn that there is a lag in the transmission of energy prices, and over-reliance on current data may lead to excessive monetary policy tightening.

Original link https://m.theblockbeats.info/flash/377016

Key points

The report, citing data, said that US October core CPI rose 0.3% month-on-month, above the market expectation of 0.2%, exceeding expectations for the third consecutive month.
US October headline CPI rose 0.4% month-on-month, above expectations.
US October food prices rose 0.5% month-on-month; grocery prices recorded the largest monthly increase since April.
Intracity transportation services prices recorded the largest monthly increase since 2020, and airfare and delivery services prices also rose.
Services prices excluding energy and housing rents rose 0.4% month-on-month, and owners' equivalent rent rose 0.3%.
The report said that over the past 3 months, US computer and peripheral equipment prices rose at an annualized rate of 25%; October electricity prices rose 0.9% month-on-month, the largest increase in 6 months.
The report, citing Morgan Stanley estimates, said that AI-related factors have contributed about 6 basis points to core CPI so far this year; the report also said the impact is currently relatively limited, and pressure may rise after data center investment expands.
Chicago Fed President Goolsbee described the latest inflation data as close to disturbing.
The report relayed that Fed Governor Waller previously said that if core CPI rises 0.3% or more month-on-month, the December meeting should consider a 50 basis point rate hike.
The report said Goldman Sachs has incorporated another 25 basis point rate hike in March 2027 into its forecast, and expects the federal funds rate target range to be 4.25% to 4.50% by then.
The report mentioned that some economists warned that there is a lag in energy price transmission, and over-reliance on current data may lead to excessive monetary policy tightening.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

CPI is an indicator measuring changes in consumer prices. The report's core CPI month-on-month increase was above expectations, and prices for food, services, electricity, and others also rose. The report lists energy, services, and AI-related costs as inflationary pressure factors, and relays the views of Federal Reserve officials and Goldman Sachs on policy.

Why it matters to readers

Inflation data and policy expectations may affect interest rate judgments, but the report does not provide immediate price reactions in crypto assets or US stocks, so it cannot be concluded from this how the market has already changed.

When reading this kind of news, one can distinguish reported price data from officials' views and institutional forecasts; single-month data and forecasts themselves do not equal future interest rate decisions.

Risks and unknowns

The original text did not attach a link to the official US CPI release, and the specific data and subsequent revisions were not verified here.
The estimate that AI factors contributed about 6 basis points to core CPI is a Morgan Stanley estimate relayed by the report, not official statistics provided in the text.
The report did not provide market price reactions after the inflation data was released.
The subsequent impact of energy price transmission and future policy decisions remain uncertain.

US October core CPI rose 0.3% month-on-month, exceeding expectations for 3 consecutive months

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