The US consumer price index (CPI) rose 2.7% in July, driven by higher prices for certain goods and services, according to the Bureau of Labor Statistics. The annual inflation rate is the highest since February, with core CPI rising 3.1% from last year.
Economists attribute the increase to the Trump administration’s tariff policy, which is feeding into higher prices for consumer goods such as household furnishings and apparel. Tariffs are a tax on imports, typically passed on to consumers by businesses, resulting in a loss of $2,400 for the average household in the short run.
Despite some evidence that tariffs are fueling inflation, others argue that the impact will be felt over several months as businesses delay passing on higher costs. Stephen Miran, chair of the White House Council of Economic Advisers, claims there is no evidence to support this claim. However, experts note that the tariff effects are most apparent for goods prices and that immigration policy may be limiting labor supply in certain sectors, contributing to upward pressure on inflation.
The core CPI figure has been rising steadily, with a 0.2% increase in each of the last two months. Economists expect this trend to continue, with predictions suggesting an annual rate of 3.8% by the end of the year as tariffs take full effect.
Source: https://www.cnbc.com/2025/08/12/heres-the-inflation-breakdown-for-july-2025-in-one-chart.html