Consumer prices reached a six-year high of 2.9% in the one-year period ending June, while the more closely followed core rate (which excludes food and energy) gained 2.3% in the annual period. For the month, consumer prices edged up by 0.1% as higher automobile and medical costs were mitigated by declining energy prices. Moderate inflation pressures could further extend both price indexes, supporting the Federal Reserve’s (Fed) current pace of gradual rate hikes. Producer prices rose by 0.3% for the month and by 3.4% for the year, primarily due to tariff-related acceleration of steel and metal prices.
President Trump proposed tariffs on an additional $200 billion worth of Chinese exports and threatened a 20% import tax on European autos as trade tensions continued to mount between the U.S. and its trading partners.