“Are tariffs to blame for rising inflation? Experts weigh in”

Are tariffs to blame for rising inflation? Experts weigh in

“Next week, for example, the Bureau of Labor Statistics will release critical inflation data that covers the month of June. Inflation indices are comprehensive: Rising goods prices are showing up in the inflation data; however, they’ve largely been overshadowed by factors such as falling gas prices and a continued slowing of price hikes for services, particularly rent and housing. As such, inflation data to this point has remained fairly muted — for now. “It’s not surprising that tariff effects have not shown up strongly in official consumer prices yet,” according to a Goldman Sachs’ July 8 note. Prices are already rising, inflation is at a ‘turning point’ However, the seemingly muted headline inflation numbers don’t tell the full story: Goods prices — particularly in tariff-exposed categories — are already on the rise, both private-sector and federal data shows. The May Consumer Price Index showed that several tariff-sensitive categories saw price increases: A DataWeave analysis of 200,000 products on 13 major US e-commerce sites show that prices have risen since January: “The percentage changes are definitely higher than what we’ve seen in previous years,” Karthik Bettadapura, co-founder and CEO of DataWeave, told CNN in an interview. In June 2024, for example, home and furniture prices were up 1.9% from January, toy prices were up 0.4%, and apparel and footwear were up 0.7%, DataWeave data shows. Bettadapura said he anticipates a further and broader “price creep” in the coming months as tariffs ripple through the supply chain. And given ongoing pushback on higher prices, he expects there also to be a rise in shrinkflation (where brands may trim package sizes) and private-label expansion. The June CPI, due out next week, also is expected to be the “turning point” where the steeply higher effective tariff rate will make a bigger mark on overall inflation, said Wells Fargo’s Cervi, noting expected gains in the closely watched core goods category (which excludes gas and food).”

Prices are now starting to rise because of tariffs. Economists say this is just the beginning | CNN Business