Over the 12-month period ending June 2025, inflation in the consumer price index (CPI) in the US surged by 2.7%. That’s a notable jump from the 2.4% increase that was reported for May. This increase underscores a long-term trend of rampant inflation. Other economic factors, like the tariffs mandated by former President Donald Trump, still echo through the economy.
Mark Zandi, chief economist at Moody’s, noted that inflation is likely to take off badly over the next few blown months. He noted, “Inflation is going kick into a much higher gear in coming months.” Zandi further explained that while the current situation shows a modest rise, the effects of tariffs are starting to manifest.
The CPI peaked at an astounding 9.1% in June 2022—the largest year-over-year increase since 1981. Recent economic indicators show a patchwork of success at best, with only pockets of tangible improvement in several sectors. In June, used car and truck prices fell 4.2%. New vehicle prices decreased by 0.3% and used vehicle prices decreased by 0.7%.
Despite recent carnage in the auto sector, grocery prices have continued to rise. They increased 0.3% this month and are up 2.4% for the last year. Even with falling prices, egg prices are almost 30% higher than they were a year ago. They are down 7% from one month ago. The index for meats, poultry, fish, and eggs rose a whopping 5.6% in the past year.
Housing, the biggest part of the CPI, posted a small 0.2% monthly gain. It’s still 3.8% above what it was during the same timeframe last year. Gasoline prices were more volatile. They did increase 0.1% from May to June, but are down 8.3% year-over-year.
Core inflation increased by 2.9% in June on an annualized basis. This measure removes energy and food prices to provide a better picture of what’s happening with inflation underneath the surface. Economists are still waiting for a big impact from Trump’s tariff agenda. Expect significantly higher consumer prices over the next several months.
Sarah House, a senior economist at Wells Fargo, pointed out that “while inventory front-running has mitigated the need to raise goods prices, it will become increasingly difficult for businesses to absorb higher import duties as pre-tariff stockpiles dwindle.” This means that once businesses use up their current stockpiles purchased before tariff imposition, consumers will have to pay the higher prices.
Kevin Hassett, economic advisor at the White House, said that the new tariff policies have only caused a fraction of the inflation predicted. Yet, despite their lack of maturity, they are undeniably reshaping consumer activity in profound ways. Most importantly, he suggested that American consumers are realizing they need to buy more American-made products as a result of these tariffs.
They caution that increasing tariffs will put more pressure on companies’ production costs. These tremendous new costs will ultimately be borne by consumers. Zandi warned that “higher tariffs are adding to businesses’ production costs and that will flow through to consumers more indirectly.”
Even as 2022 inflation continues to accelerate, many economists argue that today’s conditions are not analogous to the great inflationary crisis of 2022. Stephen Kates noted that “despite accelerating inflation, this won’t be like 2022.” He understood the complicated interplay of various economic forces. He did note that there is a long-term trend in the other direction—toward inflationary pressures increasing.