by Tobias Burns
Inflation in the Federal Reserve’s preferred measurement ticked up to a 2.6 percent annual increase in June from 2.3 percent as cost increases from President Trump’s tariffs make their way into the economy.
The increase in the Commerce Department’s personal consumption expenditures price index exceeded economists’ expectations of a 2.5 percent increase.
Taking out the more volatile categories of food and energy, the index increased to a 2.8 percent annual increase, which was also above consensus estimates at 2.7 percent.
Economists were expecting price growth as a result of tariffs.
“Core goods … should reflect substantial growth due to tariffs, especially on sensitive categories like household furnishings and equipment, recreational goods, apparel, and motor vehicle parts,” analysts for Vanguard wrote in a commentary.