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Politics and Government News
Scott Horsley, NPR

Inflation heats up in June as President Trump’s tariffs start to bite

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Clothing prices jumped by 1% in June, contributing to a rise in inflation during the month. Imported clothing is one area where the effects of tariffs are beginning to be felt by shoppers.
Clothing prices jumped by 1 percent in June, contributing to a rise in inflation during the month. Imported clothing is one area where the effects of tariffs are beginning to be felt by shoppers.
Chip Somodevilla | Getty Images North America

Inflation picked up steam last month amid early signs that President Trump's tariffs are beginning to have an effect on the prices shoppers see in stores.

Consumer prices in June were up 2.7 percent from a year ago, according to a report Tuesday from the Labor Department. That's a larger annual increase than the month before.

Prices rose 0.3 percent between May and June, also a sharper increase than the previous month.

Rising rents were the main driver of inflation in June. But the price of clothing, appliances and toys also jumped — which likely reflects the effects of import taxes. Clothing prices rose 0.4 percent while the price of appliances and toys jumped nearly 2 percent.

Energy and food costs were also higher in June, while the price of new and used cars and airline tickets was down.

The president has imposed tariffs of at least 10 percent on nearly everything the U.S. imports, with higher taxes on goods from China. The government collected $27 billion from tariffs in June — a four-fold increase from the same month a year ago.

The average tariff on imported goods is now the highest it's been since the Great Depression. And Trump has threatened to impose even higher taxes on goods from many countries, beginning on Aug. 1.

Falling energy costs had helped to keep overall inflation in check in recent months. But gasoline prices rebounded in June. And electricity costs jumped by 1 percent, as hot summer weather kept air conditioners busy.

The uptick in inflation last month cements expectations that the Federal Reserve will hold interest rates steady when policymakers meet later this month, despite mounting pressure from the White House for lower rates. Investors still think a rate cut is likely in September.

Copyright 2025, NPR