Consumer prices in the United States rose in June as tariffs imposed by President Donald Trump began to slowly take their toll on the economy.
The Consumer Price Index (CPI), a broad measure of the cost of goods and services, rose 0.3% in the month, bringing the annual inflation rate to 2.7%, the Bureau of Labor Statistics (BLS) said on Tuesday. The figure was in line with the Dow Jones consensus forecast.
Excluding volatile food and energy prices, core inflation rose 0.2% for the month, with the annual rate reaching 2.9%, also in line with expectations. However, the monthly reading was slightly below the forecast of a 0.3% increase.
Before June, the inflation rate had been on a downward trend throughout the year, with the headline CPI at an annual rate of 3% in January and gradually slowing in subsequent months despite concerns that Trump’s trade war would push up prices.
While data for June was mixed on the extent to which tariffs are affecting prices, there are signs that the duties are starting to have an impact.
Vehicle prices fell last month, with new vehicle prices down 0.3% and used cars and trucks falling 0.7%. However, tariff-sensitive clothing prices rose 0.4%. Household furniture, also affected by tariffs, jumped 1% in the month.
Housing prices rose just 0.2% for the month, but this category was still the largest contributor to the overall CPI increase. The housing index rose 3.8% from a year ago. In this category, the estimated rental income that homeowners feel they could earn by renting out their homes rose 0.3%, while the cost of accommodation outside the home fell 2.9%.
Meanwhile, food prices rose 0.3% in the month, bringing the annual rate to 3%. Energy prices rose 0.9% after falling in May, but were still slightly lower than a year earlier. Health care services rose 0.6%, while transportation services rose 0.2%.
