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Inflation kept constant in July because the price of staple foods such as food and gasoline decreased to compensate for the price increases for consumers.
However, there were worrying signs below the surface, including the evidence that the policy of Trump management for certain goods and services creates inflation into inflation, economists said. These effects will probably be more pronounced later this year, they said.
“Tariff and immigration policy fingerprints are in the entire report,” said Mark Zandi, chief economist from Moody's.
“The tariff and the immigration effects do not scream us, but they will certainly speak very loudly and they will start screaming in the next few months,” said Zandi.
In July, the consumer price index rose by 2.7%compared to a previous year, unchanged compared to the previous month and less than expected, the Bureau of Labor Statistics reported on Tuesday.
The CPI is a widespread level of inflation that follows how quickly the prices rise or fall on a basket full of goods and services, from haircuts to coffee, clothing and concert tickets.
In July, food and gasoline prices according to the CPI data went by 0.1% and 2.2% monthly – or, rejected -.
Economists are happy to check inflation data that strips energy and food prices that can be volatile from month to month.
This so-called core CPI number has increased in recent months: from July 2024 it rose by 3.1%in July 2025. This rose compared to an annual pace of 2.9% in June and has been the fastest annual rate for Core CPI since February.
“[W]I assume that it will increase to a climax of 3.8% by the end of the year, since the tariffs of consumer prices were bleeding in more detail, “wrote Michael Pearce, deputy US manager of the US economist at Oxford Economics, on Tuesday.
Inflation most clearly for consumer goods
Customs are a tax for imports paid by US companies that import the good or service.
Companies usually pass on these higher costs at least partially to consumers, according to economists. The Yale University's budget tension estimates that the average budget loses 2,400 US dollars at short notice because the Trump administration was set up on August 6th.
Tariff effects are most clear for goods prices, such as for household furniture and clothing, said Zandi.
Inflation for all core goods – stretching food and energy products – has increased by 0.2%in the past two months, according to the CPI data. In typical times, freight prices are generally flat or decreased, said Zandi.
“It is clear evidence of the effects of the tariff that they are on the rise,” said Zandi.
According to CPI data, prices for household furniture rose by 0.7% in July. Clothing prices rose by 0.1%and toys of 0.2%.
No “one -month event”
Core freight inflation annually increased by 1.2%in July, the fastest pace in over two years.
“There are clear signs that a number of goods prices move higher and that core goods inflation bring to a more than two years of high, but some important tariff positions, including cars and main devices, have no major impact,” Pearce wrote.
Stephen Miran, chairman of the White House Economic Council, said on Tuesday about CNBCs “Squawk on the Street” that the CPI data “no evidence” show that the tariffs have fueled higher consumer prices.
“It just didn't take out,” said Miran.
It is unlikely that the full effect of tariffs has been noticeable for several months, since the companies delay the transfer of higher costs, according to the economists.
“This is not a one -month event,” said Sarah House, senior economist at Wells Fargo Economics. “The effects are pulled out for many months because companies are waiting to see where these tariffs settle.”
You can slowly test the price sensitivity of consumers instead of everyone at once, she said. Companies may still sell an old inventory that is not subject to import duties, said economists.
“It was a very dynamic time for these trade negotiations … but we are still a way to see where things settle,” said Jerome Powell, chairman of the Federal Reserve, last month.
In addition, there is indications that the policy of Trump administration restricts the range of workers in certain economic sectors in terms of immigration and puts pressure on the pressure on inflation under pressure, said Zandi.
This can be seen in the personal nursing services – categories such as haircuts, dry cleaning and veterinary services – that many immigrants use, he said. Fewer immigrants who work in these sectors limits the job offer and puts the wages that companies pay in order to attract employees, he said.