Is the threat of inflation receding or just hitting snooze? The July Consumer Price Index came in at +0.2% for the month and +2.7% year-over-year, matching June's level and coming in just under forecasts. If you’ve been eyeing grocery prices, the food index rose 2.9% over the past year—with dairy and beef seeing the sharpest monthly gains. Meanwhile, core CPI (excluding food and energy) ticked up 0.3% from June and 3.1% annually, its highest in six months.
Falling gasoline prices (-2.2% in July, -9.5% from a year ago) helped mask stronger inflation in tariff-sensitive goods like furniture, shoes, and tools. Trump’s import tariffs are quietly raising costs, but businesses front-loaded inventories pre-tariff, creating a lagging effect for consumers. Economists warn, “Inflation is coming.” It’s just not here yet.
- Footwear prices jumped 1.4% in July
- Furniture and bedding: +0.9%
- Tools and hardware: +1.2% in July
Moral of the story: What feels mild today could be tomorrow’s sticker shock—just in time for back-to-school and the holidays.
