Consumer price index (CPI), August 2025, year-to-date change of 2.9% from the previous–year month. This huge increase is based on an Employment Situation report released by the Bureau of Labor Statistics. This large increase is another sign that inflation is returning, mostly because of the re-inflation of consumer goods. Experts blame this increase on a perfect storm of circumstances, including the impact of tariff measures put in place by then-President Donald Trump’s administration.
Sarah House, a senior economist at Wells Fargo Economics, emphasized that the tariffs imposed on various goods have contributed significantly to the escalating inflation rates. Or, more specifically, these policies have decimated consumer-facing goods for business — like apparel and foodstuffs. Mark Zandi, chief economist at Moody’s, echoed this sentiment, stating, “Inflation is uncomfortably high and it’s accelerating.”
By August 2025, there was massive inflation on prices in critical sectors. Tariff policy Tariffs have played an underappreciated yet large role in increasing apparel prices. They strike tough on an overwhelming amount of apparel coming in from Asian nations. Together, these tariffs have placed significant upward pressure on prices, setting Americans consumers up to pay significantly more for the clothes they need.
Food prices have experienced some of the same pressure. Here’s how tariffs are causing everyday costs to increase, such as coffee, fruits and vegetables. The real story is that beef prices are skyrocketing, monopolizing the headlines. As a result, millions of American consumers are experiencing “sticker shock” due to the tight supply and continued strong demand.
The report notes this spike in electricity prices over 6% since August 2024, adding even greater pressure to household budgets. All this sounds encouraging, but airline fares skyrocketed almost 6% from July to August. At the same time, hotel and motel lodging costs jumped nearly 3%. Grocery prices were up 2.7% for August YoY. This increase is up from July’s 2.2%.
Even as inflation continues to accelerate, the hot labor market has been leaking signs of a coming cool down. This has been shifting labor demand to lowering wage growth. Because of this, consumers will be hurt even further with escalating costs. It’s no wonder that economists are fretting about the sustainability of consumer spending. They’re focused on the dynamic relationship between a softening labor market and increasing inflationary pressures.
President Trump invoked the International Emergency Economic Powers Act to impose sweeping tariffs on trade partners, an action that has had lasting implications for the American economy. The protective nature of these tariffs was supposed to apply to domestic industries, but instead, they have introduced significant cost increases for consumers in every sector.