In a sign that President Donald Trump’s sweeping tariffs are beginning to drive prices upward for many goods, the Federal Reserve’s preferred inflation gauge rose last month, the Associated Press reports.
The Commerce Department said Thursday that prices rose 2.6% in June compared with one year ago, up from a 2.4% annual pace in May. Excluding volatile food and energy categories, so-called “core” prices ticked up 2.8% in the past year, the same as the previous month.
Both figures lie above the Fed’s 2% target.
On a monthly basis, prices picked up 0.3% from May to June, with core prices also rising 0.3%.
The government’s measure of gas prices spiked 0.9% from May to June, while grocery costs were up 0.3%, furniture prices rose 1.3%, appliances 1.9% and computers 1.4%.
Conversely, air fares fell 0.7% from May to June, and the cost of hotel rooms dropped 3.6% over the same period.
Consumer spending rose 0.3% from May to June, the report shows. It’s a modest rise that suggests American spending is still cautious. Adjusted for inflation, the increase was 0.1%.
U.S. incomes reportedly rose 0.3% as well last month, rebounding from a 0.4% drop in May. Adjusted for inflation and taxes, however, incomes in June were flat.
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