June 13 – Annual inflation in the United States rose modestly to 2.4% in May, up from 2.3% in April, according to data from the Bureau of Labor Statistics. The increase comes amid the continued implementation of tariffs on a wide range of imported goods, contributing to elevated costs for businesses and consumers.
On a month-to-month basis, the Consumer Price Index (CPI) rose by 0.1%, slowing slightly from April’s 0.2% gain. Core inflation, which excludes food and energy prices, also rose by 0.1% in May, compared to a 0.2% increase the previous month.
Economists had forecast a higher annual CPI increase of 2.5% in May, but the data showed a milder uptick, adding to signs of a gradual economic cooldown. The labor market added 139,000 jobs in May, falling below the 12-month average of 149,000 new jobs per month. Job growth in March and April was also revised downward. Despite this, the unemployment rate has remained steady, fluctuating between 4% and 4.2%.
The impact of tariffs has been felt across sectors, with multiple companies reporting price increases linked to rising input costs. A recent survey by insurance company Allianz found that 54% of U.S. firms plan to raise prices due to tariffs.
“While the inflation numbers for April and May are moderate, we expect the effect of trade-related measures to become more visible during the summer,” said Ryan Sweet, Chief U.S. Economist at Oxford Economics.
Manufacturing activity has also shown signs of strain. Industry sentiment declined for the third consecutive month, reaching its lowest level in six months, according to recent survey data. Despite expectations of domestic production gains, there has been no significant increase in manufacturing output linked to the tariffs.
Some of the current import duties include a 10% baseline tariff on all imported goods, a 25% tariff on autos, and a 30% tariff on selected imports from Asia. Even seemingly unrelated goods, such as canned food, have experienced price hikes due to the increased cost of materials like steel.
With the Federal Reserve scheduled to meet next week, investors are paying close attention to any updates on interest rate policy. The federal funds rate currently stands between 4.25% and 4.5%, and no change is expected. Policymakers have acknowledged the role of trade measures in influencing price stability.
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