A key inflation gauge rose slightly less than anticipated in July, amid concerns about rising prices due to President Trump’s tariffs.
The Consumer Price Index increased 2.7 percent year-over-year, lower than estimates of 2.8 percent.
Costs for medical care, airfares, household furnishings and other goods rose in July, but they were offset by a decline in gas prices.
However, core inflation, which strips out volatile prices for food and energy, rose 3.1 percent over the past year, the first time since February it’s been above 3 percent.
U.S. small business sentiment rose in July, the National Federation of Independent Business said Tuesday.
A new Yahoo Finance/Marist Poll found that 40 percent of adults said their family’s finances have stayed the same, 33 percent said they’ve gotten worse, and 27 percent said they’ve gotten better.
The Trump administration has so far escaped the most dire inflation forecasts, although economists say the costs from tariffs are slowly being passed through to consumers.
“There continue to be persistent trouble spots, with medical care, household furnishings and operations, recreation, and personal care all rising at an outsized monthly pace,” Greg McBride, chief financial analyst at Bankrate, said in an analysis.
Still, economists said the lack of runaway inflation makes it likely the Federal Reserve will cut interest rates next month.
“Although core annual inflation is back to its highest level since February, today’s CPI print is not hot enough to derail the Fed from cutting rates in September,” said Seema Shah, chief global strategist at Principal Asset Management.
The White House celebrated the inflation report.
“Today’s CPI report revealed that inflation beat market expectations once again and inflation remains stable,” press secretary Karoline Leavitt said Tuesday.
“Wage growth for American workers is beating inflation once again,” Leavitt added.
Trump attacked Federal Reserve Chairman Jerome Powell for being “too late” on interest rates, and he threatened the central bank chief with a “major lawsuit” over the costs of renovations at a Federal Reserve building.
MEANWHILE…
• Trump intends to nominate E.J. Antoni, a top economist at the conservative Heritage Foundation, to serve as the next commissioner of the Bureau of Labor Statistics after he pushed out the previous leader.
Antoni has suggested the agency should stop issuing monthly jobs reports, claiming the data the agency uses is unreliable.
He told Fox Business News the agency should “suspend issuing the monthly jobs reports, but keep publishing more accurate, though less timely, quarterly data.”
ELSEWHERE…
• Trump signed an executive order extending his tariffs truce with China for another 90 days as he seeks a permanent agreement with Beijing.
• The Trump administration is under scrutiny over a “bizarre” deal that will require two major U.S. chipmakers to give 15 percent of their revenue to the federal government for specific chips sold to China.
• Trump met Intel CEO Lip-Bu Tan days after calling on him to resign over his ties to China.
“The meeting was a very interesting one. His success and rise is an amazing story,” Trump posted on Truth Social after the meeting. “Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week.”
• Trump says he won’t slap any tariffs on gold.