Consumer prices in the U.S. rose modestly in July 2025, driven by President Donald Trump’s tariffs, raising concerns about future price increases and the reliability of economic data.
The Consumer Price Index (CPI) increased by 0.2% in July, following a 0.3% rise in June, with the annual inflation rate holding steady at 2.7%, according to the Bureau of Labor Statistics (BLS).
Core inflation, excluding volatile food and energy sectors, climbed 0.3% month-over-month, marking its largest gain since January.
Tariff-sensitive goods like household furnishings, up 0.7%, and footwear, up 1.4%, saw notable price increases, reflecting the impact of Trump’s trade policies.
Energy prices fell 2.2%, offsetting unchanged food prices, though specific food items like beef and milk rose by 1.5% and 1.9%, respectively.
Trump’s tariffs, including a 10% universal import tariff and higher rates on steel and aluminum, have begun affecting consumer prices, despite some retailers delaying impacts by using pre-tariff inventories.
Economists warn that as these inventories deplete, companies may pass more costs to consumers, with leaders from Walmart, Nike, and Macy’s indicating price hikes.
The labor market also faces strain, with revised data showing only 33,000 jobs added in May and June, down from an initial 291,000, complicating the Federal Reserve’s efforts to balance employment and inflation.
Concerns over the BLS’s data reliability have intensified after budget cuts led to suspended CPI data collection in parts of Nebraska, Utah, and New York, and 15% of samples elsewhere.
The share of imputed data in CPI calculations jumped to 35% in June from 8% a year earlier, raising fears of increased volatility in economic reports.
Trump’s firing of BLS Commissioner Erika McEntarfer and nomination of E.J. Antoni, a BLS critic, have further fueled doubts about data integrity.
“Investors might want to hold back on the no-inflation celebration,” said Christopher Rupkey, chief economist at FWDBONDS, warning of future price pressures as tariff effects fully emerge.