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Tariffs

US Prices Continue to Rise Amid Trump's Tariffs Shake-Up

Strategic Insights

— 1 min read

US prices continued to rise in July, with an annualized inflation rate of 2.7% higher compared to the same month last year, according to the consumer price index (CPI). Although the inflation rate remained steady between June and July, core inflation, which excludes energy and food, accelerated to 3.1% over the last month. The rise in prices is attributed to Donald Trump's tariffs on imported goods, which have started to impact consumer costs.

Key Takeaways:

  • The annualized inflation rate jumped 0.4% since April, with prices 2.7% higher in July compared to the same month last year.
  • Core inflation, which excludes energy and food, increased to 3.1% over the last month, a higher pace than in June.
  • Trump's tariffs, including a 10% universal tariff on all imports, have been in effect since the spring, with higher tariffs on certain industries like steel and aluminum.
  • Economists say it takes time for tariffs to show up in consumer prices, but companies like Walmart, Nike, and Macy's have already started passing down costs to customers.
  • Tariffs have also hit the labor market harder than expected, with a revision down to 33,000 jobs added to the economy in May and June.
  • The US Federal Reserve is in a tight spot, as the increase in prices and shrinking labor market make it harder to keep inflation in check.
  • Trump has directed his ire at economic officials, including the Fed and the Bureau of Labor Statistics (BLS), which collects and reports economic data.
  • The White House cut the BLS's budget, forcing the agency to downsize data collection and potentially impacting the accuracy of its data.

Statistics:

  • Annualized inflation rate: 2.7% higher in July compared to the same month last year, according to the CPI.
  • Core inflation: increased to 3.1% over the last month, a higher pace than in June.
  • Number of jobs added to the economy in May and June: 33,000, revised down from 291,000.

Sources:

  • "US prices continued to rise in July, according to key economic data released on Tuesday, as Donald Trump's international tariffs shakeup started to impact consumer costs." (New York US)
  • The Bureau of Labor Statistics
  • The White House
  • The Orange County Register via Getty Images

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