Inflation in the United States rose slightly less than anticipated in July, as the effects of President Donald Trump's tariffs showed modest impacts. The consumer price index (CPI) increased by 0.2% for the month and 2.7% on a 12-month basis, according to the Bureau of Labor Statistics (BLS) report released Tuesday (August 12). This was just below the Dow Jones estimates of 0.2% and 2.8%, respectively.

Excluding food and energy, the core CPI rose by 0.3% for the month and 3.1% from a year ago, aligning with forecasts. The monthly core rate marked the largest increase since January, while the annual rate was the highest since February. Shelter costs contributed significantly to the rise, increasing by 0.2%, while food prices remained flat and energy prices fell by 1.1%. Tariff-sensitive new vehicle prices were unchanged, though used cars and trucks saw a 0.5% increase. Transportation and medical care services both posted 0.8% increases.

Despite the tariffs, some categories showed minimal price changes. Household furnishings and supplies increased by 0.7%, while apparel prices rose by just 0.1%. Canned fruits and vegetables, typically affected by tariffs, remained flat. Former White House economist Jared Bernstein remarked on CNBC, "The tariffs are in the numbers, but they're certainly not jumping out hair on fire at this point."

The report comes at a critical time for the economy and the BLS, which has faced criticism from President Trump for alleged political bias. Trump recently fired the previous BLS commissioner and nominated E.J. Antoni, a critic of the bureau, as the new chief. The BLS has faced budget and staffing cuts, affecting data collection and accuracy.

Federal Reserve officials are closely monitoring inflation as they consider their next interest rate decision in September.

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