US inflation increased by 2.7% over the year ending in June, the biggest increase since February. This jump is a significant leap over last month, which had inflation at 2.4%. This price increase is mostly the result of President Donald Trump’s tariffs. Currently, these tariffs are driving up costs in nearly every sector.
The recent inflation data indicates that consumers are experiencing higher prices for a range of goods, including clothing and coffee. In particular, coffee prices increased by 2.2% between May and June, and citrus fruits increased by 2.3%. In fact, toys had their largest month-over-month increase at 1.8%, and appliances were up 1.9%. Clothing prices rose 0.4%, the largest jump in several months.
Trade analysts have pointed to a striking increase in the U.S.’s average effective tariff rate this year. This dramatic increase is directly related to the economic policies that the Trump administration executed. A 10% tax on most imported goods, called the value-added tax, has been especially impactful in raising retail prices. Some industries have suffered even harsher tax increases, too, specifically steel and cars, adding fire to the inflation crisis.
The tariffs will go into effect on August 1st. That raises the risk of more aggressive price hikes in the months ahead. Olu Sonola, an economist, noted that “there is a trickle of what is likely tariff-induced inflation in some categories, particularly household appliances and furnishings.”
He further emphasized that “this trickle is likely to gain momentum in the coming months,” suggesting that consumers may face even greater financial pressures as the impact of tariffs permeates through the market.
Even with the recent trends in inflation, many experts are still hesitant to conclude anything for sure. Ryan Sweet, an economic analyst, commented that the latest inflation figures are unlikely to settle ongoing debates about the broader economic implications of tariff policies.