US Consumer Inflation unchanged in July as Trump's sweeping tariff worries persist
The consumer price index (CPI) rose 2.7 percent from a year ago in July, same as in June, said the Department of Labor, as worries over the reliability of data intensify and central bank officials gauge the effects of Trump's fresh levies this year.
Analysts are closely monitoring the CPI report in particular for signs of weakening in the United States after the July government employment report recently showed weakness in the key jobs market.
The figure, however, was a touch lower than the 2.8-percent rate expected in a median forecast of analysts surveyed by Dow Jones Newswires and The Wall Street Journal.
While the indexes for energy and gasoline dropped in the month, shelter costs rose in July.
Excluding the volatile food and energy segments, "core" CPI accelerated to 0.3 percent on a month-on-month basis in July, up from a 0.2-percent rise.
From a year ago, underlying inflation rose 3.1 percent, picking up pace too from before.
Indexes that rose over the month included medical care, airline fares and household furnishings, the report showed.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Indian Express
26 minutes ago
- Indian Express
Trumponomics was supposed to be a disaster! Then why hasn't the US economy fallen off a cliff (yet)?
US President Donald Trump's tariff upheaval was followed by predictions of market mayhem and a progressive decimation of the American economy. Nearly six months down the line, the impact is at best muted: the S&P 500 is actually around 10 per cent higher than it was on Liberation Day, while the dollar, though down, has strengthened over the past fortnight. Despite higher import duties on practically all of its trading partners, Trump's tariffs haven't fueled a massive spike in consumer prices in the US yet. On Tuesday, a widely followed measure of inflation in the US accelerated slightly less than expected in July on an annual basis as Trump's tariffs seemed to show a muted impact. The consumer price index increased a seasonally adjusted 0.2 per cent for the month and 2.7 per cent on a year-on-year basis, the Bureau of Labor Statistics reported Tuesday. The CPI had risen 2.7 per cent in June, when compared with the year earlier, while being slightly above the Federal Reserve's 2 per cent target. Does it portend an impending one-time price increase to serious long-drawn inflation is really the big question. There are at least three reasons why broad economic metrics still look good. One, Trump inherited an economy that was growing at over 2 per cent, near full-employment, and subdued inflation. It will take some time to wind down. Second, with tariffs looming after Trump repeatedly heralded threats, importers in the US front-loaded shipments from across countries to beat the tariffs. A lot of items on American retail shelves and the ones sold in recent months do not reflect the tariff incidence, purely because they hit the US shores before the tariffs kicked in. Trump's repeated waivers and extensions have also helped matters. The stock markets continue to get tailwinds from America's extraordinary artificial-intelligence boom, which has pushed up projected earnings for its biggest tech companies over the last 24 months. Tech has an overweight influence on the US markets. Markets also might be expecting Trump to chicken out — on the lines of the widely-used acronym TACO, or Trump Always Chickens Out — as the impact of tariffs becomes evident. The lack of a reaction so far might be emboldening him to push ahead. But it could get bad, and the downward spiral could happen really fast. While key economic data offers a somewhat subjective picture, with inflation having so far defied the worst of economists' expectations even as the US consumer remains strong, there are clear signs of pockets of weakness in the labour market and a slowdown in growth. The red flags include the firing of Erika McEntarfer, the Commissioner of the Bureau of Labor Statistics (BLS) on August 1, after the agency said that non-farm payrolls — or new jobs outside of agriculture –— rose by just 73,000 in July, while the numbers for the previous two months were revised downwards by more than a quarter of a million to a mere 19,000 for May and 14,000 for June. The US President claimed the numbers were being 'rigged' to make him and his Republican party 'look bad'. Even if a new BLS chief is appointed to make the data look good, there are fundamental flaws in Trump's worldview that could impact the American economy in the months to come. The stated aim of Trump's tariffs — reshoring manufacturing and creating jobs back in the US — is difficult to achieve given America's loss of competitiveness, especially in labour-intensive industries. Higher import costs will progressively feed into prices in the US; costlier goods will dent consumption, and with weaker demand job creation will taper off. These strains are likely to become more pronounced during the Fall-Winter/Christmas shopping season, potentially shaping voter sentiment in the run-up to the midterm elections. Given that the Trump administration has significantly hiked tariffs on virtually all US trading partners, with some major economies such as the European Union, Japan and South Korea facing a 15 per cent tariff while others including Canada, Switzerland, Brazil and India facing much higher rates, upwards of 35 to 50 per cent, unless a deal is reached for each of the key trading partners, the average tariffs charged by the US on its imports would be somewhere in the 15-20 per cent range. In January, the effective average US tariff figure was 3 per cent. For the US, this entire exercise would be inflationary, even if importers or retailers were to bear part of the costs. The effects of inflation are starting to show up in the most likely of areas, with reports of retail majors such as Costco and Walmart hiking prices of appliances, furniture, tools and children's items. Also, while the Gross Domestic Product, or GDP, grew at a robust annual rate of 3 per cent in the second quarter of 2025, which was up from a half per cent contraction in the first quarter, the big driver was strong consumer spending, But much of that was on account of goods that were imported on a front-loaded basis. There is the possibility of a sharp slowdown going forward, and while a recession is not on the cards yet, a slowdown is looming. Apart from tariffs, there are concerns around Trump's tax bill and how that will impact the US deficit. Some of this concern was reflected on August 6, when the 10-year American Treasury yield rose following a somewhat dismal $42 billion auction of new securities by the US Treasury Department. The benchmark 10-year note yield was up more than 2 basis points to 4.22 per cent, while the 30-year Treasury bond yield climbed more than 4 basis points to 4.813 per cent, according to Reuters data. One basis point equals one hundredth of a percentage point, and yields and prices move in opposite directions. The US Federal Reserve, the country's central bank, has a dual mandate of ensuring price stability and maximum employment. Fed chief Jerome Powell, who is under fire from Trump for not cutting rates, is ironically faced with a two-sided risk now, a threat to both its goals. Inflation is set to rise while employment numbers are likely to taper off. The challenge for Powell is that while keeping its benchmark interest rate too high could keep inflation in check, it could also dent the already shaky job market. The second half of 2025 is undoubtedly going to be more unpredictable than the first, and the impact of Trump's fickle tariff outlook could actually start showing up as business owners begin to make well educated decisions about how much they actually have to increase prices. Whereas once American shoppers were spoiled for choice, now firms that succeed in the post-Trump regime will do so not only because they are the most innovative or efficient, but because they are good at gaming the system or lobbying for sops. Fortunes will be spent on lobbying, and that makes it difficult to remove any of these tariffs even after a new administration takes office. So, the high tariff US external outlook is likely to fester even beyond Trump.
Economic Times
26 minutes ago
- Economic Times
PM Modi uses Trump backlash in India to bolster support before vote
Synopsis Amidst escalating trade tensions with the US, Indian Prime Minister Narendra Modi is leveraging the friction with US President Donald Trump to rally support from farmers ahead of a crucial state election. Modi has vowed to protect farmers' interests, signaling resistance to US pressure on agriculture and dairy markets. ANI Prime Minister Narendra Modi, Union Home Minister Amit Shah, Defence Minister Rajnath Singh and others (file photo) Indian Prime Minister Narendra Modi and his ruling party have seized on growing friction with US President Donald Trump to bolster support from farmers ahead of a crucial state election.A day after Trump stunned New Delhi by slapping 50% tariffs on the nation's exports to the US, Modi promised supporters he'd protect the interests of farmers, even if it means he pays a personal price for it. Modi's top aides, including his trade minister, have signaled India won't give in to US pressure to open up its agriculture and dairy markets to American imports. On Tuesday, leading farmer groups met with India's agriculture minister in New Delhi to pledge support to the about-turn on India in recent weeks — slamming the Asian nation for its trade barriers and ties with Russia — has shifted public sentiment against the US president and pushed Modi into defensive mode. Opposition parties and farmer groups have also repeatedly warned the government against offering the US excessive concessions to clinch a trade deal.'India's tone has changed quite dramatically. This is a smart political spin by Modi,' said Shumita Deveshwar, chief India economist at Lombard. 'The US is pushing for access to agriculture, and external forces trying to pry open the sector won't go down well with farmers,' she said. 'India can't be seen cowing down to a foreign power.' All of this is playing out in the run up to a crucial election in the eastern state of Bihar, where nearly half the population work in farming and related sectors. Modi's Bharatiya Janata Party is reliant on its allies in the state to hold on to power, with some analysts seeing the election as a close contest. Modi's approval ratings have held steady in the face of Trump's actions, according to daily tracker data from polling agency C-Voter. About 46% of respondents surveyed on Aug. 1 were 'very much satisfied' with Modi as prime minister, compared with 45.8% on April 15.'Modi has maintained momentum and edge, and the latest on Trump-US will only aid it,' said Yashwant Deshmukh, the founder and director C-Voter. 'There is no swing towards the opposition and I don't see electoral fortune shifting away from Modi.'Farmers — one of the most influential voting blocs in the world's most populous nation — include millions of smallholders with less than two hectares (five acres) of land. They've proved powerful in the past in effecting political change. A year-long protest by hundreds of thousands of farmers forced Modi's government to repeal three contentious agricultural reform laws in late 2021. In a meeting with farmer groups on Tuesday, Agriculture Minister Shivraj Singh Chouhan hailed the importance of the sector. An official statement that followed the meeting cited several farmer groups pledging their support to Modi's government.'The courageous decision not to allow American companies into our agriculture and dairy sectors is echoing in every field, village, and cowshed,' Virendra Lohan of the Chhattisgarh Youth Progressive Farmers' Association said in the statement. 'You have shown that the Indian farmer is not just a food provider but the very soul of this nation, a soul no foreign power can ever control.'Nalin Kohli, spokesperson for the ruling BJP, said India will continue to be driven by national priorities and 'at no cost can we cause any prejudice or risk to our farmers, agriculture and other similar sections of society.'Domestic media have largely rallied behind the government's pushback against US pressure. Prominent commentators — and even some opposition figures — have called Trump a 'bully' in recent days. Meanwhile, Swadeshi Jagran Manch, a group linked to the BJP, is pushing Indians to boycott some American goods and food chains, like McDonald's, Reuters reported on the sharpest rhetoric from Modi's officials, Defence Minister Rajnath Singh said Sunday efforts to penalize India reflect unease with the country's rising global stature. Without naming anyone, he took a veiled swipe at the US president, saying someone who sees himself as 'everyone's boss' is rattled by India's US tensions are also serving to shift attention away from recent scrutiny over a controversial revision of electoral rolls in Bihar that opposition leaders warned could disenfranchise millions from marginalized communities. Opposition groups led by the main Indian National Congress have accused the Election Commission of India of voter fraud and demanded an end to the exercise. Lawmakers have repeatedly disrupted the current parliamentary session taking place in New Delhi, demanding a debate on the matter. On Monday, police prevented Rahul Gandhi, the main face of the Congress party, from leading a protest march to the commission's offices, briefly detaining some of the protesters. Gandhi has called out Modi for his friendly ties with Trump, saying it was a misstep to align so early with a leader who's proved to be fickle. Congress President Mallikarjun Kharge accused Modi of failing to do enough to cushion the impact on farmers, even though Trump had been threatening reciprocal tariffs for months. Modi's strategy may hold for now, but analysts warn it could falter if economic pain from Trump's tariffs intensifies. Citigroup Inc. estimates that 50% tariffs would reduce India's annual economic growth by as much as 0.8 percentage points.'Trump is being a bully with regards to India and its natural for Indians to want to stand with the leaders,' said Neelanjan Sircar, an associate professor at Ahmedabad University. 'Modi might use this for his advantage but it will all depend on how economic pain pans out.'
News18
35 minutes ago
- News18
China Eases Urea Export Curbs To India In Sign Of Thawing Ties: Report
Last Updated: Beijing's decision follows Trump's latest trade measures, doubling tariffs on Indian goods to 50% as a penalty for its purchases of Russian oil. China has relaxed restrictions on urea shipments to India, signalling a possible easing of tensions between Beijing and New Delhi, Bloomberg has reported, citing people familiar with the matter. The move comes as US President Donald Trump's trade policies target both Asian nations. India, the world's largest importer of the crop nutrient, could purchase as much as 300,000 tonnes from China, according to the report. China, a major exporter of the nitrogen-based fertiliser, has curtailed sales in recent years. According to the Bloomberg report, Beijing's decision follows Trump's latest trade measures, doubling tariffs on Indian goods to 50% as a penalty for its purchases of Russian oil, a step that has 'helped warm ties" between the two countries. Relations between India and China hit a low in 2020 after deadly border clashes that killed 20 Indian soldiers and an undisclosed number of Chinese troops. Recently, India allowed tourist visas for Chinese nationals after years of restrictions, and Prime Minister Narendra Modi may meet Chinese President Xi Jinping on the sidelines of a summit in Tianjin starting August 31, the report said. Bloomberg said. In 2023, almost half of China's urea exports went to India, but Beijing halted sales to all destinations last year. The ban was partially lifted in June, though restrictions on India remained until now. While the planned 300,000-tonne volume is relatively small, it could grow into a significant trade flow, easing tight global supplies and cooling high prices. India imported about 5.7 million tonnes of urea in the fiscal year ended March 31 — down nearly 20% from a year earlier — according to the Fertiliser Association of India. Purchases from China fell sharply to around 100,000 tonnes in 2024-25 from 1.87 million tonnes a year earlier. view comments First Published: Disclaimer: Comments reflect users' views, not News18's. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use and Privacy Policy.
