Latest news with #consumer costs
Yahoo
6 days ago
- Business
- Yahoo
CPI report: Core inflation rises by most in six months, stoking tariff-driven price concerns
Inflation remained sticky in July, according to new government data released Tuesday, as investors stay alert to how much President Trump's tariffs are starting to affect consumer costs. The latest data from the Bureau of Labor Statistics showed that "core" inflation, which excludes volatile food and energy costs, rose 0.3% over the past month, surpassing June's 0.2% uptick and marking the largest gain in six months. Annual core prices rose 3.1% in July, up from June's 2.9% year-over-year increase, signaling that rising goods inflation is no longer being offset by easing services inflation. Core services prices also firmed, with shelter rising 0.2% for the second consecutive month, while transportation services and medical care services each climbed 0.8%, up from respective gains of 0.2% and 0.6% in June. Read more: July CPI breakdown: Consumers feel the crunch of accelerating inflation Heading into the report, economists expected the core Consumer Price Index (CPI) to rise 3% year over year and 0.3% month over month. On a headline basis, CPI increased 2.7% on an annual basis in July, matching June's number and slower than economists' expectations of a 2.8% rise. Month over month, prices rose 0.2% compared to June's 0.3% increase, on par with economists' estimates. The monthly drop was driven by lower gasoline prices and moderately softer food inflation. "Although core annual inflation is back to its highest level since February, today's CPI print is not hot enough to derail the Fed from cutting rates in September," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report. Shah noted some evidence of tariff-related pass-through to consumers, though not yet at a level that "rings alarm bells." One example: Footwear prices jumped 1.4% in July from the prior month — the largest monthly increase since April 2021. Other categories seeing increases included furniture and bedding, recreation, household furnishings and operations, and used cars and trucks. Airline fares jumped 4% after a 0.1% decline in June, while lodging away from home and communication were among the few major indexes to fall last month, according to the BLS. Tuesday's report arrives amid ongoing trade developments that could further alter the US effective tariff rate, now hovering near 18.6% — the highest since 1933, according to the latest Yale Budget Lab estimate. Read more: What Trump's tariffs mean for the economy and your wallet The back-and-forth raises fresh questions about the Federal Reserve's rate-cutting path. Shortly following the report, investors placed a 90% probability the Fed cuts rates by 0.25% at its September policy meeting, up from 57% last month, according to the CME FedWatch Tool. Traders still expect over two rate cuts by December. "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts," Shah said. "Markets like today's inflation print as it means the Fed can lower rates unheeded next month — rate cut decisions in October, December, and beyond may well be more complicated," the strategist added. Stocks rose immediately after the report, while the 10-year Treasury yield (TNX) hovered below 4.3%. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
CPI report: Core inflation rises by most in six months, stoking tariff-driven price concerns
Inflation remained sticky in July, according to new government data released Tuesday, as investors stay alert to how much President Trump's tariffs are starting to affect consumer costs. The latest data from the Bureau of Labor Statistics showed that "core" inflation, which excludes volatile food and energy costs, rose 0.3% over the past month, surpassing June's 0.2% uptick and marking the largest gain in six months. Annual core prices rose 3.1% in July, up from June's 2.9% year-over-year increase, signaling that rising goods inflation is no longer being offset by easing services inflation. Core services prices also firmed, with shelter rising 0.2% for the second consecutive month, while transportation services and medical care services each climbed 0.8%, up from respective gains of 0.2% and 0.6% in June. Read more: July CPI breakdown: Consumers feel the crunch of accelerating inflation Heading into the report, economists expected the core Consumer Price Index (CPI) to rise 3% year over year and 0.3% month over month. On a headline basis, CPI increased 2.7% on an annual basis in July, matching June's number and slower than economists' expectations of a 2.8% rise. Month over month, prices rose 0.2% compared to June's 0.3% increase, on par with economists' estimates. The monthly drop was driven by lower gasoline prices and moderately softer food inflation. "Although core annual inflation is back to its highest level since February, today's CPI print is not hot enough to derail the Fed from cutting rates in September," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report. Shah noted some evidence of tariff-related pass-through to consumers, though not yet at a level that "rings alarm bells." One example: Footwear prices jumped 1.4% in July from the prior month — the largest monthly increase since April 2021. Other categories seeing increases included furniture and bedding, recreation, household furnishings and operations, and used cars and trucks. Airline fares jumped 4% after a 0.1% decline in June, while lodging away from home and communication were among the few major indexes to fall last month, according to the BLS. Tuesday's report arrives amid ongoing trade developments that could further alter the US effective tariff rate, now hovering near 18.6% — the highest since 1933, according to the latest Yale Budget Lab estimate. Read more: What Trump's tariffs mean for the economy and your wallet The back-and-forth raises fresh questions about the Federal Reserve's rate-cutting path. Shortly following the report, investors placed a 90% probability the Fed cuts rates by 0.25% at its September policy meeting, up from 57% last month, according to the CME FedWatch Tool. Traders still expect over two rate cuts by December. "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts," Shah said. "Markets like today's inflation print as it means the Fed can lower rates unheeded next month — rate cut decisions in October, December, and beyond may well be more complicated," the strategist added. Stocks rose immediately after the report, while the 10-year Treasury yield (TNX) hovered below 4.3%. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Sign in to access your portfolio
Yahoo
7 days ago
- Business
- Yahoo
CPI report: Core inflation rises by most in six months, stoking tariff-driven price concerns
Inflation remained sticky in July, according to new government data released Tuesday, as investors stay alert to how much President Trump's tariffs are starting to affect consumer costs. The latest data from the Bureau of Labor Statistics showed that "core" inflation, which excludes volatile food and energy costs, rose 0.3% over the past month, surpassing June's 0.2% uptick and marking the largest gain in six months. Annual core prices rose 3.1% in July, up from June's 2.9% year-over-year increase, signaling that rising goods inflation is no longer being offset by easing services inflation. Core services prices also firmed, with shelter rising 0.2% for the second consecutive month, while transportation services and medical care services each climbed 0.8%, up from respective gains of 0.2% and 0.6% in June. Read more: July CPI breakdown: Consumers feel the crunch of accelerating inflation Heading into the report, economists expected the core Consumer Price Index (CPI) to rise 3% year over year and 0.3% month over month. On a headline basis, CPI increased 2.7% on an annual basis in July, matching June's number and slower than economists' expectations of a 2.8% rise. Month over month, prices rose 0.2% compared to June's 0.3% increase, on par with economists' estimates. The monthly drop was driven by lower gasoline prices and moderately softer food inflation. "Although core annual inflation is back to its highest level since February, today's CPI print is not hot enough to derail the Fed from cutting rates in September," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report. Shah noted some evidence of tariff-related pass-through to consumers, though not yet at a level that "rings alarm bells." One example: Footwear prices jumped 1.4% in July from the prior month — the largest monthly increase since April 2021. Other categories seeing increases included furniture and bedding, recreation, household furnishings and operations, and used cars and trucks. Airline fares jumped 4% after a 0.1% decline in June, while lodging away from home and communication were among the few major indexes to fall last month, according to the BLS. Tuesday's report arrives amid ongoing trade developments that could further alter the US effective tariff rate, now hovering near 18.6% — the highest since 1933, according to the latest Yale Budget Lab estimate. Read more: What Trump's tariffs mean for the economy and your wallet The back-and-forth raises fresh questions about the Federal Reserve's rate-cutting path. Shortly following the report, investors placed a 90% probability the Fed cuts rates by 0.25% at its September policy meeting, up from 57% last month, according to the CME FedWatch Tool. Traders still expect over two rate cuts by December. "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts," Shah said. "Markets like today's inflation print as it means the Fed can lower rates unheeded next month — rate cut decisions in October, December, and beyond may well be more complicated," the strategist added. Stocks rose immediately after the report, while the 10-year Treasury yield (TNX) hovered below 4.3%. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at Sign in to access your portfolio
Bloomberg
7 days ago
- Business
- Bloomberg
Trump Mocks Goldman, Says Bank Made ‘Bad Prediction' on Tariffs
President Donald Trump assailed David Solomon, the CEO of Goldman Sachs Group Inc. on Tuesday, saying the bank had made a 'bad prediction' about the impact of his sweeping tariff agenda on markets and consumer costs. 'They made a bad prediction a long time ago on both the Market repercussion and the Tariffs themselves, and they were wrong, just like they are wrong about so much else,' Trump said on his social media platform.
Yahoo
7 days ago
- Business
- Yahoo
CPI: Core inflation rises by most in six months, stoking tariff-driven price concerns
Inflation ticked higher in July, according to new government data released Tuesday as investors stay alert to how much President Trump's tariffs are starting to affect consumer costs. The latest data from the Bureau of Labor Statistics showed that "core" inflation, which excludes volatile food and energy costs, rose 0.3% over the past month, surpassing June's 0.2% uptick and marking the largest gain in six months. Annual core prices rose 3.1% in July, up from June's 2.9% year-over-year increase, signaling that rising goods inflation is no longer being offset by easing services inflation. Core services prices also firmed, with shelter rising 0.2% for the second consecutive month, while transportation services and medical care services each climbed 0.8%, up from respective gains of 0.2% and 0.6% in June. Heading into the report, economists had expected core CPI to rise 3.0% year over year and 0.3% month over month. On a headline basis, the Consumer Price Index (CPI) increased 2.7% on an annual basis in July, matching June's number and slower than economist expectations of a 2.8% rise. Month over month, prices rose 0.2% compared to June's 0.3% increase, on par with economists' estimates. The monthly drop was driven by lower gasoline prices and moderately softer food inflation. "Although core annual inflation is back to its highest level since February, today's CPI print is not hot enough to derail the Fed from cutting rates in September," Seema Shah, chief global strategist at Principal Asset Management, wrote in reaction to the report. Shah noted some evidence of tariff-related pass-through to consumers, though not yet at a level that "rings alarm bells." One example: footwear prices jumped 1.4% in July from the prior month — the largest monthly increase since April 2021. Other categories seeing increases included furniture and bedding, recreation, household furnishings and operations, and used cars and trucks. Airline fares jumped 4% after a 0.1% decline in June, while lodging away from home and communication were among the few major indexes to fall last month, according to the BLS. Tuesday's report arrives amid ongoing trade developments that could further alter the US effective tariff rate, now hovering near 18.6% — the highest since 1933, according to the latest Yale Budget Lab estimate. The back-and-forth raises fresh questions about the Federal Reserve's rate-cutting path. Shortly following the report, investors placed a 90% probability the Fed cuts rates by 0.25% at its September policy meeting, up from 57% last month, according to the CME FedWatch Tool. Traders still expect over two rate cuts by December. "The concern for the Fed is that with inventory run-down, the tariff-induced boost to inflation is likely to grow over the coming months, meaning that inflationary pressures are likely to pick up just as the Fed starts to resume rate cuts," Shah said. "Markets like today's inflation print as it means the Fed can lower rates unheeded next month – rate cut decisions in October, December and beyond may well be more complicated." Stocks rose in the immediate aftermath of the report while the 10-year Treasury yield (^TNX) hovered below 4.3%. This is a breaking news report and will be updated. Allie Canal is a Senior Reporter at Yahoo Finance. Follow her on X @allie_canal, LinkedIn, and email her at
