Here’s the inflation breakdown for July 2025 — in one chart

Inflation held steady in July as price declines for staples like groceries and gasoline helped offset price increases for consumers.

However, there were worrying signs under the surface, including evidence that Trump administration policies are stoking inflation for certain goods and services, economists said. Those effects will likely become more pronounced later this year, they said.

“Tariff and immigration policy fingerprints are all over the report,” Mark Zandi, chief economist of Moody’s, said.

“The tariff and immigration effects aren’t screaming at us, but they’re certainly speaking very loudly and over the next couple months they’ll start yelling,” Zandi said.

The consumer price index rose 2.7% in July relative to a year earlier, unchanged from the prior month and less than expected, the Bureau of Labor Statistics reported Tuesday.

The CPI is a widely used measure of inflation that tracks how quickly prices rise or fall for a basket of goods and services, from haircuts to coffee, clothing and concert tickets.

In July, grocery and gasoline prices declined — or, deflated — by a respective 0.1% and 2.2% on a monthly basis from June, according to the CPI data.

Economists like to look at inflation data that strips out energy and food prices, which can be volatile from month to month.

This so-called core CPI figure has been rising in recent months: It climbed 3.1% in July 2025 from July 2024. That’s up from a 2.9% annual pace in June and is the fastest annual rate for core CPI since February.

“[W]e expect it will rise further to a peak of 3.8% by the end of the year as tariffs bleed through more fully to consumer prices,” Michael Pearce, deputy chief U.S. economist at Oxford Economics, wrote Tuesday.

Tariffs are a tax placed on imports, paid by U.S. companies that import the good or service.

Businesses generally pass on those higher costs to consumers, at least in part, economists said. The Budget Lab at Yale University estimates the average household will lose $2,400 in the short run as a result of all tariffs the Trump administration put in place as of Aug. 6.

Tariff effects are most apparent for goods prices, like those for household furnishings and apparel, Zandi said.

Inflation for all core commodities — which strips out food and energy commodities — was up 0.2% in each of the last two months, according to the CPI data. In more typical times, goods prices are generally flat or declining, Zandi said.

“That they’re on the rise is clear evidence of tariff impact,” Zandi said.

Household furnishings prices were up 0.7% on a monthly basis in July, according to the CPI data. Apparel prices were up a more muted 0.1%, and toys 0.2%.

On an annual basis, core commodities inflation was up 1.2% in July, the fastest pace in over two years.

“There are clear signs a range of goods prices are moving higher, pushing core goods inflation to a more than two-year high, but…