Clothing prices jumped by 1% in June, contributing to a rise in inflation during the month. Imported clothing is one area where the effects of tariffs are beginning to be felt by shoppers.
Chip Somodevilla/Getty Images North America
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Chip Somodevilla/Getty Images North America
Inflation picked up steam last month amid early signs that President Trump’s tariffs are beginning to have an effect on the prices shoppers see in stores.
Consumer prices in June were up 2.7% from a year ago, according to a report Tuesday from the Labor Department. That’s a larger annual increase than the month before.
Prices rose 0.3% between May and June, also a sharper increase than the previous month.
Rising rents were the main driver of inflation last month. But the price of clothing and appliances also jumped — which likely reflects the effects of import taxes. Clothing prices rose 0.4% and appliances prices jumped 1.9%.
Energy and food costs were also higher in June, while the price of new and used cars and airline tickets was down.
The president has imposed tariffs of at least 10% on nearly everything the U.S. imports, with higher taxes on goods from China. Trump has threatened to impose even higher taxes on goods from many countries, beginning on Aug. 1. The average tariff on imported goods is now the highest it’s been since the Great Depression.
Falling energy costs helped to keep overall inflation in check in recent months. But gasoline prices rebounded in June. And electricity costs jumped by 1%, as hot summer weather kept air conditioners busy.
The uptick in inflation last month cements expectations that the Federal Reserve will hold interest rates steady when policymakers meet later this month, despite mounting pressure from the White House for lower rates.