Grocery prices rose 2.4% over the past year|Public Domain Mark 1.0
Prices rose 2.7% in June, up from 2.4% in May, according to the Bureau of Labor Statistics.
Core inflation, which excludes food and energy, also rose to 2.9%, matching economists’ forecasts.
Food and housing drive price increase
- Grocery prices rose 2.4% over the past year.
- Meat, poultry, fish, and eggs increased by 5.6%.
- Egg prices remain nearly 30% higher than last year, though they dropped 7.4% from May.
- Housing costs, the largest component in the inflation index, rose 3.8% and contributed most to the overall increase.
Tariffs add pressure
Business costs are expected to rise as President Donald Trump’s 30% tariffs on goods from the EU and Mexico are set to start on August 1. Many companies are passing these added costs to shoppers.
Prices of tariff-sensitive items, such as furniture, toys, and clothing, rose sharply. However, car prices fell as buyers rushed to make purchases.
Services show signs of weak demand
Hotel prices dropped 3.6%, and airline fares decreased 0.1%, indicating weaker consumer demand. Slower rent increases also helped ease inflationary pressure.
Some relief in other areas
Gasoline prices are 8.3% lower than a year ago. Prices for used cars and trucks dropped 0.7%.
Market and Fed reaction
The mixed data left markets uncertain: S&P 500 and Dow fell, while Nasdaq reached a new high.
Federal Reserve Chair Jerome Powell has hinted at potential rate cuts as the effects of tariffs on inflation and growth remain unclear. Goldman Sachs estimates consumers will bear 70% of tariff costs.
Economists remain split: some see signs of rising inflation, while others argue consumer weakness will keep it in check.