Inflation remained stubborn in July, as energy and food offset increases elsewhere

The pace of consumer inflation remained steady in July, the Bureau of Labor Statistics reported Tuesday, as food and energy prices remained subdued.

The pace of consumer inflation remained steady in July, the Bureau of Labor Statistics reported Tuesday, as food and energy prices remained subdued.

Yet a measure excluding those categories, which tend to be more volatile, showed the inflation rate increasing, suggesting the U.S. economy remains hampered by rising price pressures amid President Donald Trump’s tariffs push.

The year-on-year increase of 2.7% for the broadest inflation measure was essentially unchanged from June and undershot forecasts for a 2.8% pickup. But the “core” measure climbed 3.1%, up from 2.9% in June, the highest reading since February.

Some economists are now raising the prospect that tariffs are nudging the U.S. economy toward stagflation, where the job market weakens even as price growth accelerates. Gabby Jones / Bloomberg via Getty Images fileThe report showed mixed effects from the trade duties. Furniture price growth picked up in July, while apparel price growth decelerated and appliance prices declined outright. The main drivers of inflation last month were largely in categories outside of trade, like housing, airfare and car insurance.

“There is some sign of tariff pass through to consumer prices but, at this stage, it is not significant enough to ring alarm bells,” Seema Shah, chief strategist at Principal Asset Management, said in a note following the report’s release.