The latest United States consumer price index (CPI) report has sparked mixed reactions from politicians, economists, and businesses. The report shows that inflation rose 0.2% in July compared to the previous month and 2.7% from a year ago. While some see this as good news, others view it as bad.
Republicans like Senator Rick Scott of Florida argue that the lower-than-expected inflation rate is great news for families. They point out that energy and gas prices decreased, which has helped reduce costs. However, Democrats, such as Representative Kathy Castor, disagree, saying that Trump’s tariffs are raising grocery bills to line the pockets of his billionaire friends.
Economists say the data is mixed and should be viewed with caution. Douglas Holtz-Eakin, president of the American Action Forum, describes it as “modest bad news.” Jason Furman, an economist at Harvard University, warns that politicians cherry-pick the data to support their arguments and that there’s always a way to slice and dice it to suit different views.
The report also shows that core inflation, which excludes food and energy prices, rose 0.3% in July and 3.1% from a year ago. This is higher than Federal Reserve projections for 2025. However, experts agree that the effects of tariffs on consumer prices are still modest so far.
The US economy is currently in a wait-and-see moment, with many studying how the recent trade policies will impact the country. While some studies have shown that tariffs can harm the economy and raise consumer prices, others suggest that the current rate of inflation is not directly related to Trump’s tariffs.
As the situation unfolds, economists caution against putting too much stock in a single report. “Never believe one month’s data,” says Holtz-Eakin. The July CPI report highlights the importance of looking at multiple factors and trends when assessing the economy’s health.
Source: https://www.aljazeera.com/news/2025/8/16/republicans-say-price-report-is-a-boon-democrats-say-bust-whos-right