CNN
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US inflation heated back up in June, rising to its highest level in four months, as price increases — including those from tariffs — packed a bigger punch.
Consumer prices rose 0.3% last month, pushing the annual inflation rate higher to 2.7%, the highest since February, according to the latest Consumer Price Index data released Tuesday by the Bureau of Labor Statistics.
Tuesday’s data came right in line with what economists were expecting, as gas prices rose for the first time in five months and other prices increased in key services and goods categories.
Excluding gas and food, which tend to be quite volatile, core CPI rose 0.2% from May and 2.9% for the 12 months ended in June, marking an acceleration from 0.1% and 2.8%, respectively, the month before.
Stocks moved higher after the report, and at the opening bell the Dow ticked up slightly, while the S&P 500 gained 0.4% and the Nasdaq Composite gained 0.8%.
In recent months, President Donald Trump has enacted a sweeping trade policy of tacking steep tariffs on most goods that come in to America.
The sheer breadth of the tariffs as well as the fits-and-starts approach to their implementation has roiled markets and caused heightened uncertainty among businesses and consumers as to how much prices would move higher.
However, inflation has remained relatively tame in recent months due to a variety of factors, including ongoing disinflation trends in housing and other key services, falling gas and travel prices (in part due to weakened demand from uncertainty), and businesses loading up on pre-tariff inventories.
Economists cautioned that the tariff-related price hikes wouldn’t come quickly nor in one fell swoop and would likely start to hit consumers more as the year went on.
They also anticipated tariff impacts would become even more apparent in the June CPI data.
This story is developing and will be updated.
