MAGA CONSEQUENCES: Consumer Price Index Rises 3.1 Percent From a Year Ago

August 12, 2025

(NYT)~A key measure of underlying inflation rose in July as President Trump’s tariffs intensified price pressures across a wider range of consumer goods and services.

“Core” C.P.I., which is closely watched by the central bank, jumped 0.3 percent over the course of the month, or 3.1 percent on a year-over-year basis. That is one of the largest monthly increases so far this year and represents the fastest annual pace in five months. In June, core inflation rose 0.2 percent from the previous month, or 2.9 percent from July 2024.

The July data, which was released by the Bureau of Labor Statistics, provides a clear sign that businesses are more readily passing along tariff-related costs to their customers after a prolonged period in which price gains were muted. Still, the price gains came in more or less as expected, suggesting the central bank can move ahead with plans to soon restart interest rate cuts that it put on hold in December.

Businesses have managed to avoid passing along price increases because of a strategy earlier in the year to stockpile goods that were likely to be subject to Mr. Trump’s levies. Many companies have also sought to absorb the costs themselves in order to avoid driving away customers, some of whom are increasingly under financial strain.

But the July data showed more businesses reaching a tipping point, left with little option but to raise prices following June’s notable uptick. The biggest impact has so far been concentrated in categories such as furniture, appliances and other household wares, as well as recreation goods and footwear.