Query the Bureau of Labor Statistics public API for series CUUR0000SA0, the not seasonally adjusted CPI-U for all items, U.S. city average, and ask for 2025. Eleven months come back with numbers. September is 324.800. November is 324.122. Between them sits 2025 M10 -.[1]
A dash. Not a provisional figure, not an estimate flagged for revision. There is no October 2025 CPI, there will not be one, and BLS has said so plainly: data collection stopped on 1 October 2025 and did not resume until 12 November, and the bureau “is unable to retroactively collect these data."[2] Field agents visit stores and call landlords. You cannot phone someone in December and ask what they charged in October.
Index clauses are drafted against two failures: the index gets discontinued, or the index gets revised. October 2025 was neither. The series is alive and unrevised and one observation is missing from it, which is the one thing the substitution language in a standard CPI escalation clause does not reach.
What the hole looks like#
The 2025 appropriations lapse ran 43 days. On 21 November 2025 BLS announced it “will not publish an all items or an all items less food and energy estimate for October 2025,” and said the November release, pushed back to 18 December, “will not include 1-month percent changes for November 2025 where the October 2025 data are missing."[3] For series built from non-survey sources BLS said it would publish October values alongside November, and expected “the number of publishable indexes to be small.”
All items was not among them. Neither was rent. The rent of primary residence index, CUUR0000SEHA, runs 438.212 in September, a dash in October, 439.275 in November.[1] Housing is surveyed on a six-month panel, so the units due in October 2025 were the same ones last priced in April 2025 and next priced in April 2026, and the gap propagated forward. Mark Bowman and Craig Brown, economists in the BLS Office of Prices and Living Conditions, published an analysis of the problem on 12 May 2026. Carrying the April 2025 rent values forward would have left October’s rent index unchanged from September’s 438.212, which they noted was “an unlikely economic reality."[4] In April 2026, a year and a half after the lapse ended, BLS paused publication of two research rent series, R-CPI-NTR and R-CPI-ATR, citing “uncollected CPI Housing Survey data for October 2025 and competing priorities."[5]
None of that is a lease problem yet. It becomes one the moment a rent formula names October.
Three institutions, three different numbers#
The derivatives market needed an October figure in November 2025 and could not wait. On 27 November 2025 ISDA published a market practice note recommending 325.604 as the initial reference index for new U.S. CPI-U trades from 28 November, derived from the fallback the Treasury uses for inflation-protected securities.[6] That fallback is in the Code of Federal Regulations: “If the CPI for a particular month is not reported by the last day of the following month, we will announce an index number based on the last available twelve-month change in the CPI,” computed as the prior month’s index multiplied by the twelfth root of the prior month’s twelve-month ratio.[7]
Run it. September 2025 is 324.800, September 2024 is 315.301, and 324.800 x (324.800 / 315.301)^(1/12) = 325.60438. That is where 325.604 comes from, and it is reproducible from two public numbers in one line of arithmetic.
BLS itself needed an October CPI-U for a different purpose and picked a different method. In a notice dated 8 May 2026 the Labor Productivity and Costs program said “the missing CPI-U index in October 2025 was estimated using the average of September and November values to create an October estimate."[8] That is (324.800 + 324.122) / 2 = 324.461. The program also marked October as missing during seasonal adjustment so the made-up value would not contaminate its seasonal models, which tells you what BLS thought of its own estimate.
So: 325.604 from Treasury’s rule, 324.461 from BLS’s productivity program, and a dash from the CPI database. Take a lease with $1,200,000 of annual base rent adjusting on 1 January 2026 by the change in CPI-U from October 2024 (315.664) to October 2025.
| Substitute for October 2025 | Increase | Year one | New base rent |
|---|---|---|---|
| 325.604, Treasury fallback | 3.1489% | $37,787.01 | $1,237,787.01 |
| 324.800, September carried forward | 2.8942% | $34,730.60 | $1,234,730.60 |
| 324.461, September and November averaged | 2.7868% | $33,441.89 | $1,233,441.89 |
| 324.122, November pulled back | 2.6794% | $32,153.18 | $1,232,153.18 |
The spread between the top and bottom rows is 0.4695 percentage points, or $5,633.84 in the first year. Escalators compound off the new base, so on a ten-year term with 3 percent increases thereafter the choice of substitute is worth $64,585.64. Nobody drafted that. It fell out of which arithmetic the parties happened to reach for.
Notice also that the two obvious moves are not symmetrical. November 2025, at 324.122, is lower than September 2025, at 324.800. The index went down. A clause saying “use the most recently published index” hands the tenant the better number here, and a clause saying “use the last index published before the measurement month” hands the landlord the better one, and neither clause was written with any of this in mind.
Why the substitution clause does not fire#
The standard formulation, the one that fills the clause banks, runs something like this: if the Index is discontinued or revised during the term, a comparable successor index shall be substituted so as to obtain substantially the same result.[12] Both trigger words are doing precise work, and neither describes what happened.
The CPI-U was not discontinued. It was published for September 2025 and for November 2025 and every month since, on schedule. It was not revised, either. Revision is a term of art at BLS: seasonal factors get recalculated each year, the reference base changes, the item structure gets restructured. October 2025 was none of those. One observation is simply absent from an otherwise healthy series.
The gap is not really a drafting failure, because BLS has the same blind spot. The bureau’s escalation factsheet tells contracting parties to “Provide a built-in method for handling situations that may arise because of major CPI revisions or changes in the CPI index base period,” and reassures them that BLS “always provides timely notification of upcoming revisions or changes."[9] The bureau’s own how-to article on writing an escalation contract, by Malik Crawford and Kenneth J. Stewart, walks through population group, area coverage, item category, reference base, seasonal adjustment, publication lag, caps and floors.[10] It does not contemplate the index failing to appear, because in 2012 that was not a thing that happened.
Some leases do handle it, and they read like someone had been burned before. A dealership lease form that Sonic Automotive filed with the SEC in 2009 defines the Price Index as the “Consumer Price Index-United States City Average All Urban Consumers” and then adds, separately from the discontinuation language, that “If the Price Index for the month preceding the applicable [Year] Purchase Price Adjustment Date is not available as of any [Year] Purchase Price Adjustment Date, then the increase shall be calculated using the most current available Price Index."[11] Two sentences, and the second one solves October 2025 outright.
The definiteness question underneath#
If the lease is silent, the fight is not really about which substitute is fairer. It is about whether the escalation obligation is enforceable at all.
New York draws the line in two cases that every leasing lawyer knows and that almost nobody applies to index clauses. In Joseph Martin, Jr., Delicatessen v. Schumacher the Court of Appeals refused to enforce a renewal option at “annual rentals to be agreed upon,” holding that “a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable."[13] A decade later, in 166 Mamaroneck Ave. Corp. v. 151 East Post Road Corp., Chief Judge Wachtler upheld a 21-year renewal at a rent to be fixed by arbitration, because the parties had “invited recourse to an objective extrinsic event, condition or standard on which the amount was made to depend."[14] Definiteness comes either from a method inside the four corners of the lease or from an objective standard outside it.
A CPI escalator is the cleanest example of the second kind there is. Its entire claim to enforceability is that the number is fixed by someone who is not a party to the lease. Which raises the question nobody wanted: when the objective extrinsic standard produces nothing for the month the lease named, does the obligation collapse back into an agreement to agree?
I do not think most courts would say yes, and I would not want to be the tenant betting on it. The parties plainly intended rent to move with inflation, an index exists, and a court asked to supply a reasonable term has at least four defensible candidates, one of which is written into federal regulations. But Mamaroneck is a holding about a mechanism that worked, not about a mechanism with a hole in it, and I could not find a reported decision anywhere that addresses a single missing month in a live federal index. The first one will probably be argued in 2027, and how it goes will depend on how hard the lease leans on the words “the Index for October.”
The leases where the hole never closes#
A 1 January 2026 adjustment is a one-year problem. Two structures make it permanent.
The first is the fixed base index. Plenty of leases signed in late 2025 define the Base Index as the CPI-U for the month in which the term commenced, or the month before, and then measure every future adjustment against it. A 15-year lease commencing in November 2025 with a base index of October 2025 has no base index for the whole term. Every escalation for 15 years runs off a number that does not exist.
The second is the annual average, and this one is subtler because a number does exist. The published 2025 annual average for CPI-U all items is 321.943. Sum the eleven published monthly levels and divide by eleven and you get 321.943 exactly, so the published annual average is an eleven-month mean.[1] That is a sensible thing for a statistical agency to do. It is not what a lease describes when it defines the annual index as the average of the twelve monthly index figures for the calendar year, and a tenant with a sharp pencil will notice that the two are not the same. Against the 2024 annual average of 313.689, the published figure gives 2.6313 percent. A twelve-month mean using the BLS productivity program’s own October estimate gives 2.6982 percent. Small, and it compounds, and it is the kind of thing that surfaces four years later during a lease audit rather than at the time.
Meanwhile the formula that came through clean was the one nobody thinks of as well drafted. The Social Security cost of living adjustment measures third-quarter CPI-W against third-quarter CPI-W, July through September. SSA announced the 2.8 percent increase for 2026 on 24 October 2025, three weeks into the shutdown, because every input it needed had already been collected.[15] The measurement window, not the sophistication of the clause, is what saved it.
Congress has already conceded this problem once#
When LIBOR ended, the private contract market did not sort itself out. Congress enacted the Adjustable Interest Rate (LIBOR) Act on 15 March 2022 specifically for contracts that were governed by U.S. law, would not mature before 30 June 2023, and lacked “fallback provisions providing for a clearly defined and practicable replacement,” and the Federal Reserve’s implementing rule of 16 December 2022 substituted SOFR-based rates into those contracts by operation of law.[16] The whole architecture was an admission that the volume of tough legacy paper was too large and the drafting too varied to leave to courts.
There is no such statute for the CPI, and there will not be one for a single missing month. Each lease sorts it out on its own terms. The ones that cannot end up in front of a judge who has not seen the question before.
What happens next is on the calendar#
The current continuing resolution runs to 11 December 2026.[17] Federal employees have been through three funding lapses in the twelve months to September 2026 totalling 123 days: the 43-day lapse from 1 October 2025, a four-day partial lapse from 31 January to 3 February 2026 that touched Labor among other departments, and the 76-day Department of Homeland Security shutdown that ended on 30 April 2026.[18] BLS came through 2026 intact. Every monthly CPI-U from January through August 2026 is published, and the August figure of 334.980 is a 3.397 percent increase over August 2025.[1]
That last number is the part landlords have noticed. Twelve-month CPI-U ran 2.386 percent in January 2026 and 4.249 percent in May before easing back.[1] Three percent caps that were free to give away in 2021 are binding now, which means the difference between a clause that computes and a clause that argues is worth real money in both directions.
And the timing of the next fight is fixed. A lease adjusting on 1 January 2027 off an October-over-October formula needs the October 2026 index, which BLS publishes in mid-November, and the October 2025 index, which it will never publish. The landlord’s asset manager will find this out while preparing the rent notice, in November, with a 1 January effective date and no time to negotiate. If the December funding deadline is missed, December 2026 collection is at risk too, and that hits the January-over-January leases the same way.
None of this sits apart from the rest of the lease. Controllable-expense caps are usually written as a CPI number too, and whether a tenant ever sees the benefit of a decrease is decided by the one-way ratchet in the operating expense clause rather than by the index. A disputed escalation is also exactly the kind of charge a tenant finds too late, once the audit rights have expired. Where the rent is reset by valuation rather than by index, the fight moves to the appointed panel instead, which is its own problem, and the ground rent reset arbitration cases show how little a court will review once it gets there. The escalation schedule also runs off the option schedule, and counting renewal options matters for more than the term length.
Finding the October clauses before November does#
Acrebase reads the escalation provision out of every lease in a portfolio and pulls out the four things that decide whether the clause computes: the named series, the base month or base period, the measurement window, and whether there is any fallback other than discontinuation. Then it flags the leases where the base month or either end of the measurement window is October 2025, and separately the leases whose fallback language reaches discontinuation and revision but stops there. That second list is the one worth having by the end of October, because it is the population where a rent notice is about to go out with a number somebody invented.
It does the same across the clause library and negotiation playbook, so the index-unavailable fallback is in the approved form once rather than added by whoever remembers, and a redline that quietly cuts it back to discontinuation-only gets caught during drafting instead of during a 2031 audit. For a landlord running one national form across a few hundred leases, the useful output is not an opinion on which substitute is fairer, but a list of which leases can answer the question at all.
If you are a landlord, pull the October leases now rather than in November. Where the base month is missing and the lease is silent, say what you are going to do before you bill it, put the method and the arithmetic in the notice, and expect to negotiate rather than to be right. Going forward, add a sentence that sits separately from your discontinuation language and names the failure it covers. If the Index for a specified month is not published, the value for that month is the one produced by 31 CFR Part 356, Appendix B, Section I. Or it is the average of the published values for the months either side. Pick one and write down which. The Treasury formula is the cheaper of the two to draft, because the text already exists and you only have to point at it, and on October 2025 it also happens to be the higher number. Say that out loud in the negotiation rather than hoping nobody runs it.
If you are a tenant, ask which month your escalator measures from before you ask about the cap. If it is October 2025, or if your base index is October 2025, you have a defect that lasts as long as the lease and the landlord almost certainly has not modelled it. Do not accept “we used the Treasury fallback” as though it were the only answer; it is one of four, it is the most expensive one, and BLS’s own productivity program picked a different one. Where you are signing new paper, move the measurement window away from the start of the federal fiscal year. Every lapse in the last two years began on 1 October or at a continuing resolution deadline in December, January or February. A July-to-July window has not been in the line of fire, which is not a drafting argument anyone was making two years ago and is a reasonable one now.
Footnotes
[1] U.S. Bureau of Labor Statistics, Public Data API v2, series CUUR0000SA0 (CPI-U, U.S. city average, all items, not seasonally adjusted, 1982-84=100) and CUUR0000SEHA (rent of primary residence), retrieved 25 September 2026. Monthly values for 2025: January 317.671, February 319.082, March 319.799, April 320.795, May 321.465, June 322.561, July 323.048, August 323.976, September 324.800, October -, November 324.122, December 324.054; annual average 321.943. The eleven published monthly values sum to 3,541.373 and divide by eleven to 321.9430, so the published annual average is an eleven-month mean. 2024 values used above: September 315.301, October 315.664, annual average 313.689. Monthly values for 2026: January 325.252, February 326.785, March 330.213, April 333.020, May 335.123, June 333.952, July 333.918, August 334.980. CUUR0000SEHA for 2025: September 438.212, October -, November 439.275. https://api.bls.gov/publicAPI/v2/timeseries/data/CUUR0000SA0
[2] U.S. Bureau of Labor Statistics, “2025 Federal Government Shutdown Impact on Consumer Expenditure Surveys (CE) and Consumer Price Index (CPI)” - “BLS did not collect CPI data from October 1, 2025, through November 12, 2025,” and “Missing CPI data affected October and November 2025 indexes.” https://www.bls.gov/cpi/additional-resources/2025-federal-government-shutdown-impact-cpi.htm
[3] BLS announcement of 21 November 2025, reported in “BLS Cancels Oct. CPI; Nov. Inflation Report Set for Dec. 18” - “BLS will not publish an all items or an all items less food and energy estimate for October 2025”; for indexes built from non-survey sources, “BLS will publish October 2025 values for these series with the release of November 2025 data,” with the bureau expecting “the number of publishable indexes to be small”; the November 2025 release was rescheduled to 18 December 2025 and “will not include 1-month percent changes for November 2025 where the October 2025 data are missing.” https://www.usinflationcalculator.com/inflation/bls-cancels-october/100066644/
[4] Mark Bowman and Craig Brown, “Counterfactual imputation approaches for the housing component of the October 2025 CPI,” Monthly Labor Review, U.S. Bureau of Labor Statistics, 12 May 2026 - rent values from April 2025, the last time the April/October panel sample was surveyed, would be carried forward into October under carry-forward imputation, leaving the rent index at 438.212 and the owners’ equivalent rent index at 431.246, which the authors describe as “an unlikely economic reality.” https://www.bls.gov/opub/mlr/2026/article/counterfactual-imputation-approaches-for-the-housing-component-of-the-october-2025-cpi.htm
[5] U.S. Bureau of Labor Statistics, “Research Consumer Price Index for new tenant rent (R-CPI-NTR) and research Consumer Price Index for all tenant regressed rent (R-CPI-ATR)” - “Due to a lapse in appropriations resulting in uncollected CPI Housing Survey data for October 2025 and competing priorities, BLS paused publication of the R-CPI-NTR and R-CPI-ATR data in April 2026.” https://www.bls.gov/cpi/research-series/r-cpi-ntr.htm
[6] ISDA, Market Practice Note on determining the initial reference index for US CPI-U new trades, 27 November 2025, recommending 325.604 as the initial reference index for new trades from 28 November 2025, applying the TIPS fallback methodology to the absent October 2025 reading. https://www.lexisnexis.com/en-gb/legal/news/isda-publishes-market-practice-note-on-determining-initial-reference-index-for-cpi-u-new-trades
[7] 31 C.F.R. Part 356, Appendix B, Section I - “If the CPI for a particular month is not reported by the last day of the following month, we will announce an index number based on the last available twelve-month change in the CPI,” calculated as CPI(M) = CPI(M-1) x [CPI(M-1) / CPI(M-13)]^(1/12). The same appendix provides that if the CPI is discontinued or “fundamentally altered in a manner materially adverse to the interests of an investor,” Treasury will substitute an appropriate alternative index after consulting BLS, and that the Secretary’s determinations are final. Applied to October 2025: 324.800 x (324.800 / 315.301)^(1/12) = 325.60438. https://www.law.cornell.edu/cfr/text/31/appendix-B_to_part_356
[8] U.S. Bureau of Labor Statistics, “Productivity program treatment of missing October 2025 source data,” notice dated 8 May 2026 - “the missing CPI-U index in October 2025 was estimated using the average of September and November values to create an October estimate,” and the program “marked October as a missing observation during seasonal adjustment to prevent the imputed values from influencing our seasonal models.” (324.800 + 324.122) / 2 = 324.461. https://www.bls.gov/productivity/notices/2026/productivity-program-treatment-of-missing-october-2025-source-data.htm
[9] U.S. Bureau of Labor Statistics, “Using the Consumer Price Index for escalation” factsheet - BLS “neither encourages nor discourages the use of price adjustment measures in contractual agreements,” can “neither develop specific wording for contracts nor mediate legal or interpretive disputes,” advises parties to identify precisely which CPI series will be used including population coverage, area coverage, series title and index base period, recommends the U.S. city average over metropolitan area indexes because the latter have “substantially larger sampling errors” and greater volatility, and advises parties to “Provide a built-in method for handling situations that may arise because of major CPI revisions or changes in the CPI index base period,” noting that BLS “always provides timely notification of upcoming revisions or changes.” https://www.bls.gov/cpi/factsheets/escalation.htm
[10] Malik Crawford and Kenneth J. Stewart, “Writing an escalation contract using the Consumer Price Index,” Beyond the Numbers, U.S. Bureau of Labor Statistics, November 2012 - recommending the CPI-U, U.S. city average, all items, not seasonally adjusted, 1982-84=100; the CPI-U over the CPI-W on population coverage; broad item categories over narrow ones on sample size; that contracts state the standard reference base so that rebasing does not disturb the calculation; and not seasonally adjusted data because seasonally adjusted indexes are revised annually. It notes that the CPI for a given month is published about two weeks after the reference month. It does not address the index being unavailable. https://www.bls.gov/opub/btn/volume-1/writing-an-escalation-contract-using-the-consumer-price-index.htm
[11] Form of lease agreement filed by Sonic Automotive, Inc. as Exhibit 10.38 to its annual report on Form 10-K for 2008, filed 31 March 2009, paragraph 4(b) - the “Price Index” is defined as the “Consumer Price Index-United States City Average All Urban Consumers” published by the Bureau of Labor Statistics, “or, in the event such index is discontinued or no longer readily available, any renamed local index covering the metropolitan area in which the Premises are located or any other successor or substitute index appropriately adjusted”; and separately, “If the Price Index for the month preceding the applicable [Year] Purchase Price Adjustment Date is not available as of any [Year] Purchase Price Adjustment Date, then the increase shall be calculated using the most current available Price Index.” https://www.sec.gov/Archives/edgar/data/1043509/000119312509069485/dex1038.htm
[12] Law Insider, collected “CPI Escalation” and “Consumer Price Index (CPI) Escalation” clause samples drawn from filed contracts - the recurring formulation is that if the index “is discontinued or revised during the term, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the Index had not been discontinued or revised,” with variants sending an unresolved substitution to an agreed expert, to arbitration under the rules of the American Arbitration Association, or in one California form to the Presiding Judge of the Superior Court. https://www.lawinsider.com/clause/cpi-escalation-clause
[13] Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105 (1981), 417 N.E.2d 541, 436 N.Y.S.2d 247 (N.Y. Ct. App., 20 January 1981) - a renewal clause providing for “annual rentals to be agreed upon” was unenforceable; “a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable.” https://www.courtlistener.com/opinion/2589351/joseph-martin-jr-delicatessen-inc-v-schumacher/
[14] 166 Mamaroneck Ave. Corp. v. 151 East Post Road Corp., 78 N.Y.2d 88 (1991), 575 N.E.2d 104, 571 N.Y.S.2d 686 (N.Y. Ct. App., 11 June 1991), Wachtler, C.J. - a 21-year renewal “on the same conditions and terms as those contained in the original lease except for the amount of rent,” with the rent to be “fixed by arbitration” failing agreement, was enforceable and not an agreement to agree, because the parties “invited recourse to an objective extrinsic event, condition or standard on which the amount was made to depend.” Definiteness can come either from a methodology within the four corners of the lease or from an objective extrinsic standard. https://www.law.cornell.edu/nyctap/078_0088.htm
[15] Social Security Administration, “Social Security Announces 2.8 Percent Benefit Increase for 2026,” press release dated 24 October 2025 - the adjustment is based on the increase in the CPI-W from the third quarter of 2024 through the third quarter of 2025, and affects payments to approximately 75 million people, with retirement benefits rising by about $56 per month on average from January 2026. https://www.ssa.gov/news/en/press/releases/2025-10-24.html
[16] Adjustable Interest Rate (LIBOR) Act, enacted 15 March 2022 as part of the Consolidated Appropriations Act, 2022, and the Board of Governors of the Federal Reserve System final rule implementing it (Regulation ZZ), adopted 16 December 2022 - the Act applies to contracts governed by U.S. law that will not mature before 30 June 2023 and that lack “fallback provisions providing for a clearly defined and practicable replacement” for USD LIBOR, and the final rule replaces LIBOR references in those contracts with one of five Board-selected SOFR-based benchmark replacements incorporating the spread adjustments specified in the Act. https://www.federalregister.gov/documents/2023/01/26/2023-00213/regulations-implementing-the-adjustable-interest-rate-libor-act
[17] Continuing Appropriations and Extensions Act, 2027, passed by the House on 1 September 2026 by 370-48 and signed on 2 September 2026, funding the government to 11 December 2026. https://www.nbcnews.com/politics/congress/senate-leaders-reach-deal-avert-shutdown-2026-elections-rcna590564
[18] The three lapses in the twelve months to September 2026 total 123 days: 1 October to 12 November 2025 (43 days), 31 January to 3 February 2026 (4 days, a partial lapse affecting roughly half of federal departments including State, Treasury, Defense, Transportation, HUD, HHS, Labor, Education and Homeland Security, ended when the House passed the funding package 217-214 and the President signed the same day), and 14 February to 30 April 2026 (76 days, limited to the Department of Homeland Security, the longest shutdown in U.S. history as of 27 March 2026). https://en.wikipedia.org/wiki/2026_United_States_federal_government_shutdowns
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