Is the feared tariff-driven inflation wave really hitting consumers? The answer depends where you look. Overall US inflation held steady at 2.7% in July, but tariff-sensitive categories are now feeling the pinch:
- Furniture up 0.9%
- Footwear +1.4%—biggest jump in years
- Outdoor equipment +2.2%
- Tools/hardware up 1.2%
- Toy prices rising for third straight month
On the flip side, volatility in energy and core goods, plus pre-tariff stockpiling and carveouts (think Apple's exemptions and delayed deadlines), blunted the initial blow. Goldman Sachs estimates the consumer share of tariff costs could leap from 22% to 67% by year’s end as inventories dwindle and supply chains adjust. With Trump doubling down (tariffs on China stay at 30%, more hikes threatened on India), economists warn a "slow boil" loss of purchasing power is likely to keep building into the fall.
The big question: Will this piecemeal price pressure tip the Fed’s hand—or just stretch family budgets as we head into back-to-school and holiday seasons?
