Inflation Ticks Up in June as Tariffs Begin to Impact Prices

Consumer prices rose more than expected in June, as the effects of President Trump’s 2025 tariffs began to work their way through the economy. From household goods to groceries, the cost of living increased across several categories, leaving some economists and families concerned about what may come next.

According to new data from the Bureau of Labor Statistics, the Consumer Price Index rose 2.7% compared to a year earlier—marking the fastest pace since February. Prices also increased from May to June. That growth was partly driven by tariffs, which are starting to raise costs for businesses and consumers alike.

“Core” inflation—which excludes food and energy prices and is used to track longer-term trends—rose 2.9% from the same time last year. Economists point to categories like appliances, furniture, and clothing as some of the most affected. Appliance prices jumped 1.9%, while household furnishings rose 1%. Gas and grocery prices also increased.

These price hikes come after the Trump administration announced a new round of tariffs earlier this year targeting imports from several major U.S. trading partners. While the tariffs were framed as a way to protect American manufacturing, some analysts say they’re starting to affect the broader economy.

When businesses face higher import costs, they often pass them on to consumers in the form of higher prices. Others may try to absorb the costs, which can affect jobs or wages. Either way, families and small business owners across the country are increasingly feeling the impact.

Economists warn that inflation may continue to rise if additional tariffs threatened by the administration—such as those aimed at the European Union and other global partners—go into effect on August 1 as planned. That would further raise prices on everyday goods, they say, at a time when economic growth is already slowing.

The Federal Reserve has not changed interest rates since January and is taking a cautious approach. Officials are divided on the next step: some have argued for a rate cut to boost growth, while others point to rising inflation as a reason to stay the course. The Fed’s next policy meeting is scheduled for July 30.

In the meantime, the stock market has responded with caution. Gains following the inflation report were short-lived, as investors remain uncertain about how the trade and inflation picture will evolve.

The White House, for its part, has downplayed inflation risks. President Trump again called for a steep interest rate cut this week, citing what he described as “very low inflation,” even though the latest data shows inflation is on the rise.

As the economy continues to adjust to the effects of tariffs and other policy shifts, many Americans are watching prices—and paychecks—more closely. With more potential changes ahead, economists say the coming months will be key in determining just how far these ripple effects will reach.