BURSTConsumer prices rose 0.2 in July, according to data released Tuesday by the Bureau of Labor Statistics (BLS), as the economy braces for the full imposition of President Trump's tariffs.
The latest reading of the consumer price index (CPI) showed monthly and annual inflation plateauing as declining gasoline prices wiped out increases in the costs of medical care airfares, household furnishings and a wide range of other goods and services.
Prices rose 0.2 percent on the month and 2.7 percent, over the past year, according to BLS, in line with June levels.
But core inflation — which strips out volatile food and energy prices — came in at 0.3 percent over the past month and 3.1 percent over the past year.
The July CPI report was largely in line with the expectations of economists, who projected a 0.2 percent monthly increase in prices and an annual inflation rate of 2.7 percent, according to consensus estimates.
“The headline and core inflation measures more or less met expectations in July, but the details are cause for concern," said Greg McBride, chief financial analyst at Bankrate, in an analysis.
“There continue to be persistent trouble spots, with medical care, household furnishings and operations, recreation, and personal care all rising at an outsized monthly pace," he continued, also citing the rising costs of auto repairs and maintenance.
The CPI report is a snapshot of the economy before the full imposition of Trump's sweeping tariff agenda, which the president put on ice for most of the summer.
After levying import taxes on foreign autos, metal, and a wide range of products from Mexico, Canada and China, Trump signed an executive order on July 31 to put the rest of his previously announced tariff agenda in motion.
The new tariffs, which came into effect Aug. 7, range between 15 and 25 percent on goods from most major U.S. trading partners. Chinese goods are subjected to a 55 percent baseline tariff under a side deal Trump struck with Beijing as the two countries attempt to strike a broader agreement.
Joseph Lavorgna, a counselor to Treasury Secretary Scott Bessent, argued on social media that the inflation report "continues to show no negative impact tariffs," citing the mild increases in the prices of goods without food or energy included.
Other economists, however, are unwilling to declare the case closed.
“This could be the calm before the storm. This CPI measures inflation in July, but a slew of tariffs are taking effect this month. It may take a few months before those costs make their way fully to the consumer, but inflation is poised to pick up further in the remainder of 2025," McBride said.
July's inflation numbers are the first major economic report released by BLS in the wake of Trump's explosive response to the monthly jobs report for July.
The report showed the U.S. gaining just 73,000 jobs in July and included stunning revisions to the initially reported employment gains for May and June.
On net, the U.S. gained barely more than 100,000 jobs over the past three months, roughly a third of what economists say is necessary to prevent unemployment from rising.
Trump responded by accusing the BLS — a nonpartisan agency of statisticians — of manipulating the jobs data to benefit Democrats, but he provided no evidence to support his claim. The president also fired former BLS Commissioner Erika McEntarfer, sparking an outcry from her Democratic and Republican predecessors, along with scores of economists.
Updated at 9:09 a.m. EDT.