US inflation accelerates to 2.7% in June
Make us a preferred source
Make us a preferred source on Google
The news: US consumer prices rose 2.7% in June, rising at a faster clip than May’s increase of 2.4% and the biggest monthly advance since January, potentially signalling that companies are beginning to pass on tariff costs to consumers.
The numbers: Inflation data from the US Labor Department on Tuesday saw prices of household furnishings and supplies rise by 1% in June from the month prior, while prices of video and audio products rose 1.1%, toy prices rose 1.8% and apparel prices rose 0.4%. The four categories tend to be exposed to impacts from trade tariffs. Meanwhile, prices of new cars fell 0.3%.
Consumer prices lifted 0.3% in June compared to the month prior, while core prices lifted 0.2%. Core inflation, which strips out food and energy prices, came in at 2.9% for the month.
The context: New, higher tariff rates will potentially kick in from August which is unlikely to prompt the US Federal Reserve to cut interest rates anytime soon. Interest rates futures show investors betting on a resumption of rate cuts by the Fed from September.
Seema Shah, chief global strategist at Principal Asset Management, told Bloomberg: “While any tariff induced boost to inflation is likely to be short-lived, with higher tariffs being announced it would be wise for the Fed to remain on the sidelines for a few more months at least.”
The sources: US Bureau of Labor Statistics, Bloomberg, WSJ
