US inflation rose in June as Trump’s tariffs hiked prices
US inflation rose again in June as President Donald Trump’s tariffs began to raise consumer prices.
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The June inflation bump may be the first indication that tariffs are beginning to affect prices, but the real pressure on consumers may still be ahead.
On July 15, the Labor Bureau announced that annual inflation rate rose to 2.7% in June, the highest since February. That’s thanks to various price increases, including home, food and gasoline prices. Costs for categories that rely on imports such as clothing, shoes, audio equipment, and toys have also risen.
James Knightley, chief international economist at Bank of Dutch ING, said he expected it to be three months after the tariffs were implemented before they began to show strong in consumer price index reports in April and May.
“These are some thick moves, suggesting that we are probably seeing some preemptive recurrences. Our fear is that this tariff effect is pretty early for us to come,” Knightly said. “It should probably be supported as prices rise further over the next few months.”
In addition to tariffs, it is affected by consumer demand, sales strategies, supply chains, and more, so there is no way for businesses to predict how they will price future items in the coming weeks or months.
For consumers looking to plan what to buy, experts advise you to stock up on essentials when they see a good price and consider trading the items they want, but not immediately necessary.
What does tariffs mean for your budget?
Sooner or later, economists will suspect that tariffs will become even more expensive for our consumers. Costs are expected to rise as retailers’ import inventory was purchased at pre-Turfif prices.
The goods could be even more expensive if President Donald Trump follows plans to resume swept tariffs in dozens of countries in August and acts on his other threats.
At that point, Knightly imagines that more businesses, especially small businesses, could more easily pass tariff costs to consumers and accept them as part of a new reality.
“Many retailers try to postpone it as much as possible before handing it over,” he said. “Large retailers with large warehouses, large store bases have improved their ability to hold prices before they increase, but smaller, independent businesses don’t have that.”
The cleaning fees Trump has charged or threatened to reopen are of different sizes, but some are well above the 10% baseline.
“The level they’re talking about is that they’ll need to pass it all or partially to the consumer,” says Katherine Black, a partner at global management consulting firm Kearney. “It’s not a fee that could be absorbed by retailers or suppliers.”
What prices can be increased?
If the currently in force tariffs are in place, Knightley and Black agreed that steel and aluminum would likely raise prices. If you’re in the car market, Knightley said he imagines it would make sense for him to buy earlier than he later. Black said he expects tariffs will also affect electronics, apparel and seasonal items, including decorations.
Consumers seem to be speeding up their purchases to keep ahead of price increases. US retail sales rose 0.6% last month, exceeding June’s forecast, according to Ted Rothman, a senior industry analyst at Bankrate.
“If anything, at least in the short term, tariff fears seem to be accelerating sales,” Rothman said in a written comment. “Motor sales in June increased by 6.5% year-on-year, while furniture sales increased by 4.5%, suggesting that, as consumers saw in the spring, are accelerating certain high-value purchases they fear.”
If Trump imposes the tariffs he threatened, it could raise the costs of prescription drugs, make coffee more expensive, and the price of the vehicle could rise as carmakers rely on imported parts. Black said he hopes that “quite important” prices will rise all the way.
“That may not happen anytime soon. If you don’t see a big increase in prices on August 2nd, I don’t think that means you can sigh the relief,” Black said. “We expect to see prices rise at the time, but we’ll be back in the second half of the season.”
How to shop wisely
While it may be difficult to avoid price increases entirely, consumers can shop strategically.
“It’s a matter of taking advantage of these promotional periods,” said Adam Davis, managing director of Wells Fargo Retail Finance. “I’m probably just trying to be a little more thoughtful.”
He advises consumers to make the most of their trading and sales taxes at the end of summer or back to school.
Knightly said some businesses may now be giving breathing chambers so they can raise prices preemptively and make Labor Day sales. In that case, it makes sense to delay your purchase.
Consumers can earn transactions using browser extensions such as Camelcamelcamel, which helps users track Amazon prices and Capital One shopping. USA Today highlights coupons each month that will help people grow their money.
Black advised consumers to prioritize the essentials they really need and buy now.
“In discretionary purchases, I was refraining from assessing your personal circumstances and what the duties would look like,” Black said. “I don’t always know what I’ll need in a few months, so I’ll dry the powder for those months and buy the important ones right now.”
Reach Rachel Barber at rbarber@usatoday.com Follow her at x @rachelbarber_
