Inflation rises in June, in line with economic forecasts

Inflation ticked upward in June, rising 0.3% in June compared to 0.1% in May, according to a government report.

The Consumer Price Index rose 2.7% on a yearly basis compared to 2.4% for the 12 months ending in May, the Bureau of Labor Statistics said.

The annualized rate was in line with Wall Street predictions, though the increase could complicate President Trump’s push for the Federal Reserve to slash interest rates.

The Fed has an inflation target rate of 2%.

Core inflation, which excludes volatile food and energy prices, rose 2.9% for the year, sparking fears that Mr. Trump’s tariffs are starting to have an effect.

Home furnishings index rose 1% in June after rising just 0.3% in May, and apparel prices, which are heavily impacted by tariffs, rose 0.4% after declining 0.4% in May.

“President Trump promised to bring prices down. Instead, he and Republicans have made things worse,” said Rep. Brendan Boyle, Pennsylvania Democrat and ranking member of the House Budget Committee.

Mr. Trump’s allies, meanwhile, said the inflation report was mild overall and the Fed should feel comfortable cutting interest rates so U.S. borrowers enjoy better terms.

"Inflation remains low thanks to the Trump administration and congressional Republicans' pro-growth policies,” said Alfredo Ortiz, CEO of the Job Creators Network. “Last month's slight uptick is mostly due to higher energy prices resulting from geopolitical concerns and will quickly revert due to the Trump administration's pro-energy policies and deregulation.”

Inflation remains cool compared to doomsday predictions earlier in the year, emboldening Mr. Trump to pursue an aggressive trade agenda that includes a blanket 10% tariff on all imports and heftier levies on dozens of trading partners.

“Consumer Prices LOW. Bring down the Fed Rate, NOW!!!” Mr. Trump wrote Tuesday on Truth Social.

The White House said blaming a slight uptick in inflation on the tariffs would be a stretch.

While apparel prices were up in the new report, the cost of new cars was down, even though imported autos face a 25% and most imported clothes are subject to the general 10% tariff.

“Every month since President Trump took office, core inflation — the best measure of inflation — has beat or matched expectations. The data proves that President Trump is stabilizing inflation and the ‘panicans’ continue to be wrong about tariffs raising prices,” White House press secretary Karoline Leavitt said.

Mr. Trump pulled back on high tariffs earlier this year. But the president says he won’t budge on new tariffs that take effect on Aug. 1, unless countries offer a better deal for the U.S.

Those tariffs range from 25% to 50% and include high levies on key trading partners, including 35% on goods from Canada, 30% apiece on Mexico and the European Union.

Brazil faces a whopping 50% tariff on its goods, even though the U.S. has a trade surplus with the South American country. Mr. Trump is angry, in part, over Brazil’s prosecution of ex-President Jair Bolsonaro.

The U.S. Chamber of Commerce and the American Chamber of Commerce in Brazil (AmCham Brazil) on Tuesday urged the Trump administration to engage in high-level negotiations to avoid the “damaging” tariffs in August.

“Imposing such measures in response to broader political tensions risks inflicting real harm on one of America’s most important economic relationships and sets a troubling precedent,” the groups said in a joint statement.