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Consumer prices rose in June as president Donald TrumpThe tariffs began to work slowly through the US economy.
A Consumer Price IndexThe broad cost of goods and services increased by 0.3% per month, which is a 12-month inflation rate of 2.7%, reports the Labor Statistics Bureau on Tuesday. The figures were in accordance with the Dow Jones consensus, although the annual rate is the highest since February and is still higher than the 2% target of the federal reserve system.
With the exception of volatile food and energy prices, the main inflation gained 0.2% per month, and the annual rate exceeded 2.9% and the annual rate according to estimates. The monthly level was slightly lower than the prognosis by 0.3% profit.
By June, inflation was generally on the slope down per year, with the heading of the IPC 3% annual rate in January and gradually slower in the following months, despite the fact that Trump’s trade war raised the prices above.
Although the data in June were mixed about the influence of the tariffs over the prices, there were signs that duties were influenced.
Prices for vehicles fell per month, and the prices for new vehicles decreased by 0.3%and the car and trucks collapsed by 0.7%. However, prices for clothing, sensitive to tariffs increased by 0.4%. The housekeeping excursion, which is also affected by tariffs, increased by 1% per month.
The prices for the shelter increased by only 0.2% a month, but BLS stated that the category was still the largest participant in the overall IPC enhancement. The index increased by 3.8% compared to a year ago. As part of the category, the measurement that housing owners believe they can get when renting their properties increased by 0.3%. However, stopping from the house, she slipped 2.9%.
“It is really difficult to point to this report or any details in the report and say, ‘Yeah! See what happened to the prices from the tariffs, “said Dan North, Senior Economist Allianz Trade North America.” You get these rather massive tariff increases. This is necessarily transmitted to the consumers and I still think it will, but it is still not in this report. “
Trump used a report to start another call for the Fed to reduce interest rates.
“Consumer prices are low. Reduces Fed, now !!!” The president posted the truth socially. He later added: “The Fed should lower the speed by 3 points. Very low inflation. One trillion dollars a year will be saved !!!”
A mixed bag of indicators
The pressure on the prices went from different sources and other areas were mitigated.
Food prices increased by 0.3%per month, which noted an annual increase of 3%, while energy prices changed loss in May and increased by 0.9%, although they are still decreasing compared to a year ago. Medical services increased by 0.6%and transport services increased by 0.2%.
With rising prices, in June, hourly income decreased by 0.1%, BLS reports. Real profit increased by 1% on an annual basis.
The markets have greatly accepted inflation report. Stock Market futures were mixed and the Treasury yield was mostly negative.
Against the background of previously muted inflation ratings, Trump has called on the federal reserve system to reduce interest rates, which has not been done since December. The president insisted that the tariffs do not burden inflation, and claims that the Fed refusal to ease increases the costs that the US should pay for its problem and deficit.
Central bankers led by the chairman Jerom Powellrefused to go down. They insist that the US economy is in a strong enough position when the Fed can afford to wait to see the tariffs on inflation. Trump, in turn, urged Powell to resign and certainly called anyone else to work when the chairman’s term in May 2026 would end.
The markets expect the Fed to remain on the holding when it met in late July and then cut a quarter of the percentage in September.
