U.S. consumer inflation held steady in July, according to government data released Tuesday, but the underlying rise in prices accelerated as the effects of President Donald Trump’s tariffs were felt in the world’s largest economy.
The Consumer Price Index (CPI) rose 2.7% from July of last year, unchanged from June’s rate, the Labor Department said, as concerns grow over data reliability and Federal Reserve officials assess the impact of Trump’s new tariffs this year.
Analysts are closely watching the CPI report, particularly for signs of weakening in the U.S., after July’s government jobs report recently showed softness in the key labor market.
While energy and gasoline indexes fell during the month, the cost of housing rose in July.
Excluding the volatile food and energy sectors, core CPI accelerated to 0.3% month-over-month in July, up from a 0.2% increase.
Compared to the previous year, core inflation rose 3.1%, also picking up pace.
The report showed that indexes that increased during the month included healthcare, airfares, and household furnishings.
Meanwhile, Wall Street took the delay in the U.S.-China tariff deadline in stride, now focusing on Tuesday’s inflation figures, which could decisively influence the Federal Reserve’s decision on whether to cut interest rates, as President Donald Trump demands, or keep them unchanged.
S&P 500, Dow Jones Industrial Average, and Nasdaq futures remained nearly flat ahead of the session’s start.
For his part, Trump signed an executive order Monday night that postpones a potential showdown between the world’s two largest economies and allows 90 more days to continue negotiations on a broad trade deal. Without an extension, tariffs on Chinese imports could have risen from an already high 30%.
Beijing acted in kind.
The extension opens the door to a possible deal with Trump, but it also prolongs the uncertainty that has plagued businesses and households since the U.S. president escalated his trade war. “The extension isn’t about goodwill; it’s about keeping oxygen available for major deals,” said Stephen Innes of SPI Asset Management.
Image: Infobae
