It should have been no surprise that today’s official measure of U.S. consumer inflation showed a major sequential and yearly …Continue reading →
It should have been no surprise that today’s official measure of U.S. consumer inflation showed a major sequential and yearly decrease last month. That’s because of the energy price drop caused by the apparently short-lived Iran War ceasefire and related developments. Of course, even though this progress beat expectations (see, e.g., here), unfortunately, the recent resumption of significant fighting is bound to see prices bounce back up in next month’s report on the Consumer Price Index (CPI), and possibly some time afterwards.
What was a big surprise was that the weakness in June core monthly and annual core CPI – which as RealityChek readers know strips out energy and food prices because they’re volatile for reasons supposedly unrelated to the economy’s underlying vulnerability to inflation.
Month-on-month, they actually dipped by 0.02 percent – the first decrease since Covid-y May, 2020’s 0.13 percent decline. Year-on-year, meanwhile, core prices were up just 2.57 percent. That performance was their best since the 2.47 percent recorded this past February – the last data month before the Persian Gulf fighting first broke out.
And a big reason for the improvement have been the results from some of the important goods categories subjected to the Trump tariffs, which suggests that whatever harm they’ve done to consumers (and as RealityChek has repeatedly shown – most recently here for a different official inflation gauge – it’s been uneven at best) is fading for now.
>Apparel prices were 0.55 percent lower in June than in May – their first decrease since last November and the biggest since January, 2025’s 0.93 percent fall. Under Trump 2.0 (beginning in February, 2025, his first full month back in office), they’ve risen by 3.98 percent versus inching up just 0.08 percent during the last 16 months of the pre-tariff-y Biden administration. Moreover, the apparel inflation edge enjoyed by that last presidency narrowed compared with the May CPI results.
>Footwear became 0.34 less expensive on month in June, the first drop in this category since February’s 0.47 percent. Under Trump 2.0, footwear prices are up 4.06 percent as opposed to their 0.22 percent decrease in the last 16 Biden presidency months. That means that the Biden edge reported in May has narrowed, too.
>By contrast, furniture and bedding prices increased by 0.50 percent sequentially in June – their biggest rise since January’s 0.69 percent. As a result, under Trump 2.0, their inflation rate has been 3.15 percent versus their 2.23 price drop during the final comparable Biden months. But that Biden edge got smaller sequentially as well.
>The Trump record looks even better for appliances. Their prices tumbled by fully 1.48 percent on month in June – their best such result since last December’s 2.63 percent slide. They’ve actually become 0.07 percent cheaper during the entirety of Trump 2.0. It’s true that appliance prices cratered by a much greater 4.62 percent during that final comparable Biden stretch, but in June the Biden edge shrank, too.
Not that such Trump 2.0 relative improvement has taken place everywhere.
>In tools, hardware, outdoor equipment and supplies, prices slipped by 0.61 percent sequentially in June. But so far, such goods are 3.48 percent costlier during Trump 2.0, whereas during the last 16 months of Joe Biden’s presidency, they became 3.54 percent cheaper. And that Biden edge widened over the May results.
>Toy prices shot up by 2.47 percent sequentially in June – their biggest increase since the same result from April, 2021. Toy prices have strengthened by 5.17 percent under Trump 2.0, after weakening by 3.94 percent during that final comparable pre-tariff Biden period. And here again, the Biden advantage has widened since May.
>Sporting goods inflation has been even worse during the second Trump administration. They’ve soared by 6.39 percent since February, 2025, partly fueled by a 1.55 percent monthly June increase that was their fastest since the 2.02 percent in pre-tariff-y January, 2024. During those final 16 Biden administration months, toy prices fell by 3.15 percent, making them another category in which the Biden edge increased.
A more mixed picture emerges from the automotive sector.
>New vehicles prices inched down 0.02 percent month-to-month in June and have increased just 0.11 percent during Trump 2.0. They became slightly cheaper (0.54 percent) during the final 16 Biden administration months, and the Biden edge widened a bit over the May results. But new vehicles prices are down 0.05 percent since April, 2025 – the month the president announced his “Liberation Day” tariffs.
>Motor vehicle parts and equipment have become much more expensive than new vehicles during the second Trump term. They’re up by 3.04 percent since February, 2025, including a 0.22 percent price increase on month in June. Interestingly, they got higher during the final 16 months of Joe Biden’s term (by a not trivial 2.16 percent) but that administration’s margin has improved since May.
Aside from a longer Iran war, overall consumer prices and prices in specific tariffed goods groupings like the above could be pushed up by a promised new raft of Trump tariffs. These would mainly be imposed under a sweeping new authority with stronger legal foundations than the invalidated Liberation Day levies. But in April, Treasury Secretary Scott Bessent said they could already be imposed by now – and they haven’t been.
So the only tariffs-and-inflation-related certainty that can be counted on for the foreseeable future is that lots of tariffs-and-inflation-related uncertainty will remain in place.
