You know the drill, folks! Let’s dive right in. We’re talking about inflation in the U.S., which has just hit its highest point since January, largely thanks to some hefty tariffs introduced by none other than Donald Trump.
According to reports from the Bureau of Labor Statistics, consumer prices jumped 0.3% in June, up from just 0.1% in May. Sounds pretty fine and dandy, right? Well, hold onto your wallets, because this marks the biggest uphill climb for inflation we’ve seen in a while. Over the last year, the Consumer Price Index (CPI) climbed 2.7%, creeping up from 2.4% the month before.
Now, economists were already bracing for a rise of 0.3% month-to-month and a 2.6% increase year-on-year, so it’s not a complete shocker, but it sure does add a little spice to the economic stew. The thing is, inflation had been hanging low between February and May, which got Trump fired up, suggesting that the Federal Reserve should consider cutting interest rates.
The delays in inflation answering the tariff bell can be chalked up to businesses being slow to raise prices, probably because they were still selling off older inventory before those tariffs jumped into action.
And speaking of tariffs, Trump recently upped the ante, announcing that starting August 1st, imports from countries like Mexico, Japan, Canada, Brazil, and the European Union will face even higher tariffs. Buckle up because prices are predicted to keep climbing this summer.
Now, if we take a peek under the inflation hood and shake off the volatile food and energy sectors, the CPI actually nudged up by 0.2% in June—also a step up from the previous month’s 0.1%. Over the last year, core inflation—which weeds out those pesky food and energy fluctuations—rose 2.9%, edging up from 2.8% for three consecutive months.
For a sprinkle of balance, while the prices for goods are definitely on a roll, the cost of services is holding steady, relieving some inflationary pressure. The demand for services like flight tickets and hotel rooms hasn’t exactly been soaring, keeping those prices in check.
The Federal Reserve, always on the lookout, is keeping tabs on various inflation indicators in hopes of hitting their 2% target. With a policy meeting coming up at the end of the month, most experts expect they’ll keep the overnight rate steady between 4.25% and 4.5%.
So, there you have it folks! Inflation is sidestepping up, thanks to those tariffs, and it looks like we might be settling into a summer of rising prices. So, if you’ve been looking to stock up on anything, maybe think twice unless your wallets are ready to do some heavy lifting.
What do you think about these rising prices? Let’s chat about it! Until next time, stay savvy out there!
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