WASHINGTON (AP) — U.S. inflation was unchanged last month while a measure of underlying inflation rose to its highest level in five months, as tariffs have raised the cost of some imported goods while gas and procery prices cooled. Consumer prices rose 2.7% in July from a year earlier, the Labor Department said Tuesday, the […]
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US inflation unchanged last month, though core prices accelerated
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WASHINGTON (AP) — U.S. inflation was unchanged last month while a measure of underlying inflation rose to its highest level in five months, as tariffs have raised the cost of some imported goods while gas and procery prices cooled.
Consumer prices rose 2.7% in July from a year earlier, the Labor Department said Tuesday, the same as the previous month and up from a post-pandemic low of 2.3% in April. Excluding the volatile food and energy categories, core prices rose 3.1%, up from 2.9% in June.
The figures suggest that slowing cost growth for rents and cheaper gas are offsetting some of the impact of President Donald Trump’s sweeping tariffs. Tuesday’s figures likely reflect the 10% universal tariff Trump imposed in April, as well as higher duties on countries such as China and Canada.
Still, stubbornly high inflation puts the Federal Reserve in a difficult spot: Hiring slowed sharply in the spring, after Trump announced tariffs in April. The stalling out of job gains has boosted financial market expectations for an interest rate cut by the central bank.
Yet Fed chair Jerome Powell has warned that worsening inflation could keep the Fed on the sidelines — a stance that has enraged Trump, who has defied traditional norms of central bank independence and demanded lower borrowing costs.