Inflation Climbs As Trump Preps For Economic Showdown With New Dem Majority

Inflation rose 0.4% month-over-month in October, according to data released Tuesday by the Bureau of Labor Statistics.

The 0.4% increase was above expectations, with analysts predicting a 0.3 percentage-point increase. The inflation report showed energy prices cooled off, rising just 0.7% over the month compared to September’s 5.2% increase. Shelter costs rose 0.3% during the month, while food prices rose 0.5%.

The new report did not include a year-over-year number due to the government shutdown last year that prevented the agency from releasing its October report with employees furloughed. 

Tuesday’s inflation report comes exactly one week after Democrats dominated in midterm elections across the country with a focus on affordability. Democrats have vowed to address Americans economic concerns when they take control of Congress in January, and President Donald Trump has suggested that he’s open to cutting deals with Democrats on some of his top priorities, including immigration and economic policies. 

Trump blamed Democrats after the midterm elections when the stock market slid.

“The Stock Market suffered one of the Worst Days in History based on the results of the Election,” Trump said two days after the elections. “Such a sad thing to watch! It took so much work to get us to a level that no one has ever seen before, and then this. Your 401(k)s have, therefore, dropped. Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE.”

Economic pressures are already shaping Americans’ holiday plans. A new Barclays survey found that 57% of Americans “cite the cost of travel or gifts among their top holiday stressors.”

Last month, Treasury Secretary Scott Bessent attributed rising prices to an energy shock caused by the war in Iran, which has disrupted oil shipments through the Strait of Hormuz. He also highlighted how inflation was a major issue under former President Joe Biden and then cooled off under Trump.

Bessent pointed to the 21.5% cumulative increase in prices under the Biden administration, but still acknowledged that the Trump administration would take ownership of the economy.

“We will own the economy,” Bessent said. “We have so far this year, we’ve got a million private sector jobs. We’ve never had this many people working in the U.S. The net worth of American households are the highest that it’s ever been. So, Kristen, let’s be clear here. This is an energy supply side shock. We will get to the other side of this.”

The hotter-than-expected report also complicates the Federal Reserve’s next interest rate decision. At its October meeting, two of the Federal Open Market Committee’s 12 voting members favored raising rates to combat inflation, while the other 10 voted to maintain the federal funds rate’s target range at 3.75% to 4.0%.

Last Friday’s strong jobs report, which showed U.S. employers added 165,000 jobs in October, could further strengthen the case for a rate hike by signaling a resilient labor market.

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