CPI inflation report June 2025:

Consumer prices rose in June as President Donald Trump’s tariffs began to slowly work their way through the U.S. economy. The consumer price index, a broad-based measure of goods and services costs, increased by 0.3% on the month, putting the 12-month inflation rate at 2.7%, according to the Bureau of Labor Statistics. These numbers were in line with expectations, with the annual rate being the highest since February and still above the Federal Reserve’s 2% target.

Core inflation, which excludes volatile food and energy prices, also picked up by 0.2% on the month, with the annual rate moving to 2.9%. This was slightly below the anticipated 0.3% gain for the month. Prior to June, inflation had been on a downward trend for the year, starting at a 3% annual rate in January and gradually slowing in the subsequent months despite concerns that Trump’s trade war would drive prices higher.

There were mixed indicators in June regarding the influence of tariffs on prices. Vehicle prices fell, with new vehicle prices down by 0.3% and used cars and trucks tumbling by 0.7%. However, tariff-sensitive apparel prices rose by 0.4%, and household furnishings increased by 1% for the month. Shelter prices increased by 0.2%, with the category still being the largest contributor to the overall CPI gain.

Despite the impact of tariffs on certain sectors, it is challenging to pinpoint their exact influence on prices. Economists believe that the tariffs will eventually pass through to consumers, but this was not evident in the June report. President Trump used the report as an opportunity to call for the Federal Reserve to lower interest rates, emphasizing the need to boost consumer spending.

Price pressures in June came from various sources, including food prices which increased by 0.3% for the month, and energy prices which rose by 0.9%. Medical care services and transportation services also saw slight increases. Inflation-adjusted hourly earnings fell by 0.1% in June, while real earnings increased by 1% on an annual basis.

The Federal Reserve has been urged by Trump to lower interest rates to stimulate economic growth. However, the Fed has maintained its stance and is expected to stay on hold when it meets at the end of July. Markets anticipate a quarter percentage point cut in September. Despite the uncertainties surrounding tariffs and inflation, the U.S. economy remains resilient, and policymakers are closely monitoring the situation to ensure economic stability.