U.S. consumer prices rise by the most in five months in June, with higher costs for some goods pointing to early effects of tariffs.
The Consumer Price Index (CPI) increases 0.3% from May, the largest gain since January, the Labor Department reports.
The annual inflation rate climbs to 2.7% in June, up from 2.4% in May. Price increases in rental housing and gasoline contribute to the monthly gain.
Gasoline prices rise 1.0% after four months of declines, while food prices match May’s 0.3% increase.
Nonalcoholic beverages rise 1.4%, and coffee prices jump 2.2%. Beef increases by 2.0%, and fruits and vegetables cost 0.9% more. Egg prices fall 7.4% as avian flu effects ease. Food away from home rises 0.4%.
Core CPI, which excludes food and energy, rises 0.2% in June after 0.1% in May. Increases are seen in goods exposed to tariffs. Household furnishings and supplies rise 1.0%, and appliance prices grow 1.9%.
Apparel prices increase 0.4%, sporting goods rise 1.4%, and toys are up 1.8%. Used car prices fall 0.7%, and new vehicle prices drop 0.3%.
Rent for primary residences increases 0.3%, but hotel and motel room prices fall 3.6%. Airline fares decline 0.1%.
Healthcare costs rise 0.5%, with dental services up 1.3%, the biggest gain in three years.
Core goods prices rise 0.2% in June after being flat in May. Core services, excluding energy, increase 0.3%.
Slowing wage growth and soft demand help keep service inflation contained.
Economists expect inflation pressure from tariffs to show more clearly in the July and August data. Businesses may still be selling goods stocked before April’s tariff announcement.
New duties on imports from several countries are scheduled to take effect August 1.
The Federal Reserve is expected to keep interest rates steady later this month. Some officials say they could cut rates, but only if the labor market weakens sharply.
