President Donald Trump's far-reaching tariffs had less of an impact on consumer prices than forecasters had anticipated.
The annual inflation rate held steady in July as President Donald Trump's tariffs had less of an impact on consumer prices than forecasters expected.
Prices as measured by the Consumer Price Index rose 2.7% over the last 12 months in July, the same as in June, the Bureau of Labor Statistics said Tuesday. "Core" inflation, which excludes the volatile prices for food and energy, rose 3.1% over the last year, up from a 2.9% increase in June and reaching the highest since February.
The uptick kept the inflation rate above the Federal Reserve's target of a 2% annual rate. The overall inflation rate was less than the 2.8% increase forecasters had expected, according to a survey of economists by Dow Jones Newswires and The Wall Street Journal. Economists have closely watched inflation data to gague the impact of Trump's widespread tariffs on most countries and products brought into the U.S. from abroad, which he began implementing in February.
The U.S. shippers, businesses and consumers now pay an average of 18.6% in tariffs on imports, the highest tax rate since 1933, according to the Yale Budget Lab. Companies will ultimately pass 67% of those added costs on to consumers, economists at Goldman Sachs led by Elsie Peng estimated this week. Companies were able to delay immediate price hikes by stockpiling inventory ahead of the tariffs, among other tactics.