June Consumer Inflation Accelerates to 5-Month High Amid Tariff Impacts

10:15 AM EDT, 07/15/2025 (MT Newswires) -- US consumer inflation accelerated last month at the fastest pace since January as analysts said there were signs pointing to tariffs driving prices higher.

The consumer price index rose 0.3% month on month in June, the Bureau of Labor Statistics reported Tuesday. That's in line with the Bloomberg-polled consensus estimate and a jump from a 0.1% gain in May.

Annually, inflation accelerated to 2.7% in June from 2.4% the month prior, faster than the Street's view of 2.6%.

"Inflationary pressures heated up in June, as tariff impacts helped to push goods prices higher -- even after accounting for the pullback in vehicle prices -- while services inflation also gained some momentum following softer readings in two of the prior three months," Thomas Feltmate, senior economist at TD Economics, said in a note.

Tariff impacts were visible on categories including home furnishing, medical products and apparel, according to Feltmate.

Core inflation, which excludes the volatile food and energy components, accelerated to 0.2% last month from 0.1% in May, below the 0.3% increase expected by analysts. The annual core measure came in at 2.9%, in line with the Street's forecasts.

"Looking ahead, we expect tariff passthrough to intensify through the summer, as pre-tariff inventory stockpiles are drawn down, and businesses are forced to restock under significantly higher import duties," Feltmate said. "But the degree of tariff passthrough remains uncertain."

This uncertainty means the Federal Reserve will likely remain on the sidelines for "at least another few months," Feltmate said.

Markets widely expect the Federal Open Market Committee to again hold interest rates steady later this month, while the odds of a 25-basis-point cut in September fell to 58% on Tuesday from 61% a week go, according to the CME FedWatch tool.

Monthly food price growth held steady at 0.3% month over month, while energy prices rebounded by 0.9%, according to the official data. Annually, food prices increased by 3%, while the energy index slipped 0.8%.

Shelter cost growth eased to 0.2% sequentially from 0.3%, the BLS reported.

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