Prices Climbed Less Than Expected In July, Despite Trump’s Tariffs

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UNITED STATES – U.S. consumer prices saw a moderate rise in July, with a key measure of underlying inflation increasing slightly more than economists anticipated. The latest Consumer Price Index (CPI) report, released Tuesday by the Labor Department’s Bureau of Labor Statistics, showed prices climbed 0.2% last month, aligning with expectations. This increase puts the annual inflation rate at 2.7%.

However, the core CPI, which excludes volatile food and energy prices, rose to its highest level in six months, pushing the annual rate to 3.1%, surpassing forecasts. This uptick was partly driven by price hikes on tariff-sensitive items such as household furniture.

Economists warn that inflation pressures could continue as a result of President Donald Trump’s sweeping tariffs. One expert told Reuters that many goods currently on store shelves arrived months before the tariffs took effect, while shipments still en route have yet to face additional duties.

Despite the inflation data, market expectations remain unchanged, with investors widely anticipating that the Federal Reserve will cut interest rates in September amid signs of a weakening labor market.

At the same time, concerns are growing over the reliability of U.S. inflation and employment data, following federal budget and staffing cuts that have led to suspensions in the collection of certain CPI components. These worries intensified after President Trump fired Erika McEntarfer, head of the Bureau of Labor Statistics, shortly after July’s weak nonfarm payroll report.

On Monday, Trump nominated Heritage Foundation economist E.J. Antoni to lead the Bureau of Labor Statistics. Antoni is known for his critical stance toward the agency and has been involved with “Project 2025,” a controversial conservative initiative aiming to overhaul the federal government.