US Inflation Data Comes in Cool But Signals Tariff Bite

Economists have long warned of collateral damage from Donald Trump’s trade war, but after four months of cooler-than-predicted numbers, the US Bureau of Labor Statistics on Tuesday again reported that US inflation rose less than expected. However, unlike in previous months, the new data signaled that some companies are indeed starting to pass tariff-related costs on to consumers.

As overall prices rose 2.7% in June from a year earlier, appliances jumped the most in nearly five years, toys increased at the fastest pace since early 2021 while household furnishings and sports equipment climbed by the most since 2022. Inflation Insights President Omair Sharif pointed out that excluding cars, core goods prices climbed 0.55% in June—the biggest monthly advance since November 2021. “Today’s report showed that tariffs are beginning to bite,” he said in a note.