Menu Prices

Consumer prices rose 0.4% in October, moderating from a 0.6% increase in September but continuing to advance at a solid pace. Energy prices remained a key driver, with gasoline costs increasing 1.0% for the month, up 14.5% over the past three months and 37.4% year-over-year. Higher fuel prices have contributed to headline inflation and added pressure on household budgets. Food prices also accelerated, rising 0.5% in October after being unchanged in August.

With October 2025 inflation data unavailable because of the government shutdown, year-over-year comparisons cannot be calculated. However, consumer prices increased at a robust annualized rate of 5.7% over the past three months and were up 4.1% over the past 13 months.

Core CPI, which excludes food and energy, increased 0.3% for the third consecutive month. Core prices rose at an annualized rate of 3.7% over the past three months and 2.9% over the past 13 months. October's gains were led by transportation services (+0.8%), household furnishings and supplies (+0.7%), and medical care commodities (+0.5%), among others, while used car and truck prices fell 1.2%.

October's inflation reading came in somewhat hotter than expected and likely solidifies another interest rate increase at the Federal Open Market Committee's December 7-8 meeting, following the rate hike in September. Although the broader economy has remained resilient, inflation continues to exceed the Federal Reserve's target, reinforcing policymakers' focus on restoring price stability. Absent more sustained progress on inflation, additional monetary policy tightening could remain a possibility in 2027.

 

Menu prices continued to increase solidly 

Menu prices rose 0.5% in October, up from 0.2% in September and marking the largest monthly increase since December 2025. Through the first 10 months of 2026, menu prices increased an average of 0.3% per month and were up 4.0% over the past 13 months.

Grocery prices also accelerated, rising 0.3% in October after a 0.1% gain in September. However, grocery prices have increased at a more modest average pace of 0.2% per month so far in 2026 and were up 2.2% over the past 13 months, roughly half the increase seen for menu prices. The widening gap between food-at-home and food-away-from-home inflation remains an important consideration for consumers as they weigh the cost of dining out versus eating at home, potentially creating headwinds for restaurant traffic.

Within the food-away-from-home category, fullservice restaurants posted stronger menu price growth, with prices increasing 0.7% in October following a 0.3% gain in September. Limited-service restaurant prices rose 0.4% in October after a 0.2% increase in September. Although both segments averaged monthly price gains of 0.3% in 2026, full-service menu prices increased 4.4% over the past 13 months, outpacing the 3.6% gain for limited-service restaurants.

Within the broader food-away-from-home category, food prices at vending machines and mobile vendors rose 0.5% in October, with menu prices at employee sites and schools and other food away from home locations both unchanged for the month. These data are highly volatile from month to month. Year to date, menu prices at employee sites and schools and at vending machines and mobile vendors both averaged 0.3% per month, while the monthly average at other food away from home locations was 0.4%.

Since September 2025, prices at employee sites and schools rose 3.7%, with prices at vending and mobile vendors up 2.5%. The broader “other food away from home” category posted a 4.1% increase in prices in October over the past 13 months.    

Regionally, menu prices grew solidly in October, up 0.7% in the Midwest, 0.6% in the West, and 0.5% in the South. At the same time, menu prices increased more modestly in the Northeast, up 0.2%. Over the past 13 months, restaurants in the Midwest had the fastest menu price growth at 5.1%, followed by gains of 3.9% in the West, 3.7% in the Northeast, and 3.6% in the South since September 2025.