The three-month increase in U.S. prices for computers and peripherals equaled a 25% annualized rate; October electricity prices logged their largest monthly rise in six months as data-center demand lifted power use.
October inflation came in above expectations. The computer and peripheral figure expresses the pace on an annualized basis over a three-month period; it does not mean prices rose 25% in those three months.
Electricity prices increased 0.9% in October. Data-center demand was linked to rising electricity use, while construction of data centers and related infrastructure was described as supporting broader economic growth.
TD Securities and Morgan Stanley analysts pointed to AI demand for chips and related goods as a factor in the electronics gains. Smartphone prices also recorded their largest increase on record in October, the same month Apple launched its iPhone Duo.
Preston Caldwell, Morningstar's chief U.S. economist, said continued AI demand could lead the Federal Reserve to raise rates several times in 2027. His comments follow earlier remarks by Goolsbee on services inflation and AI data-center demand. Goolsbee also cited oil prices and tariffs as inflation pressures, and said families have difficulty cutting food and housing expenses while higher interest rates affect business investment.
The Federal Reserve’s next meeting is scheduled for Dec. 8-9. The next U.S. CPI report is due Dec. 10.
