Consumer prices in the United States rose by 2.7% in June compared to a year earlier, driven largely by surging energy costs and the expanding impact of President Donald Trump’s sweeping tariffs, according to new data released Tuesday by the Department of Labor.
The increase in the Consumer Price Index (CPI) matched analyst forecasts and marks a climb from May’s 2.4% year-on-year inflation rate. On a monthly basis, prices rose 0.3% in June—up from just 0.1% the previous month.
Tariffs Raising Concerns
The uptick in inflation comes as the White House faces mounting scrutiny over its aggressive trade strategy. Since April, Trump has imposed a 10% tariff on nearly all U.S. trading partners, along with sharply higher duties on steel, aluminum, and automobile imports.
While the administration insists these moves won’t trigger significant consumer price increases, some economists warn that the effects may be only starting to surface.
“Businesses have been absorbing some of the added costs by shrinking their margins or negotiating with suppliers,” said Nationwide economist Oren Klachkin. “But that can only go on for so long.”
Core Inflation Rises
When excluding volatile food and energy prices, “core” inflation was up 2.9% in June from the same period last year, with a 0.2% month-on-month increase—both figures showing acceleration from May.
Categories like household furnishings, apparel, and electronics—many of which are directly impacted by tariffs—have shown noticeable price jumps, suggesting early signs of a broader ripple effect.
Treasury Downplays Fears
Despite concerns from economists, Treasury Secretary Scott Bessent dismissed inflation worries, calling them “tariff derangement syndrome” and insisting the economy remains resilient.
Still, with new levies looming on critical imports such as semiconductors, pharmaceuticals, and mobile devices, businesses are bracing for continued volatility. Trump has also threatened to escalate tariffs further on major economies like the EU, Japan, India, and South Korea if trade deals aren’t reached by August.
Looking Ahead
While inflation remains within a manageable range for now, experts caution that summer could bring sharper increases if tariffs continue to bite into supply chains and production costs.
“We’re watching the most exposed sectors closely,” Klachkin said. “The real impact of these tariffs may not be fully visible yet—but it’s coming.”
