July Consumer Prices Rise 0.2%, Annual Inflation Holds at 2.7%
Consumer prices rose 0.2% in July, keeping the annual inflation rate at 2.7%. New data released Tuesday shows a modest increase in costs.
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Overview
- New inflation data was released on Tuesday, providing an updated look at consumer price trends for the month of July.
- The data indicated a 0.2% increase in consumer prices during July, reflecting a slight rise in the cost of goods and services.
- Despite the monthly increase, the annual inflation rate remained stable at 2.7%, suggesting a consistent year-over-year trend.
- This steady annual rate indicates that while prices are still rising, the pace of inflation has not significantly accelerated or decelerated.
- The consistent annual inflation rate provides important data for economists and policymakers assessing the overall health and stability of the economy.
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Analysis
Center-leaning sources frame this story by portraying former President Trump as engaging in unfounded, personal attacks against economic experts who contradict his tariff claims. They emphasize his confrontational "tactics" and systematically counter his assertions with data from "respected" financial institutions, implicitly undermining his credibility on economic matters.
"Trump’s rebuke—delivered through a pointed post on his Truth Social platform—came in response to a research note published by Hatzius on Sunday showing U.S. consumers are bearing a significant share of the costs stemming from tariffs imposed during Trump’s trade battles."
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FAQ
The 0.2% increase in consumer prices in July 2025 was mainly driven by a rise in shelter costs (up 0.2%), and increases in prices for used cars and airline fares, while gasoline and new car prices declined. Retailers were also passing on higher import duties, particularly for household furnishings and recreational goods.
Although consumer prices increased modestly by 0.2% in July, the annual inflation rate held steady at 2.7% because the year-over-year trend did not significantly accelerate or decelerate. This indicates that the pace of inflation remained consistent compared to previous months.
In July 2025, core inflation, which excludes volatile food and energy prices, was higher than headline inflation, at about 3.1% annually compared to the 2.7% headline rate. Core prices also increased monthly by approximately 0.3%, indicating underlying inflation pressures remain higher than the overall rate.
Energy prices decreased by about 1.1% in July 2025, with the gasoline index falling 2.2%. This decline in energy costs helped moderate the overall inflation rate despite rises in other categories such as shelter and used cars.
A stable annual inflation rate at 2.7% suggests to policymakers that price increases are steady without signs of runaway inflation or deflation. This steady pace informs decisions on interest rates and economic stimulus, indicating moderate inflation consistent with economic stability.
History
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