Prices On These Staples Rising As Inflation Ticks Up

Prices on everything from groceries to clothes, furniture and appliances rose in June, according to the Labor Department’s latest Consumer Price Index report.

Consumer prices rose 2.7 percent in June from a year earlier, the Labor Department said Tuesday, up from an annual increase of 2.4 percent in May.

And the economic pain stands to deepen for U.S. consumers if the latest tariffs — 30 percent levies on imports from the European Union and Mexico — take effect on Aug. 1.

“You are starting to see scattered bits of the tariff inflation regime filter in,” Eric Winograd, chief economist at asset management firm AllianceBernstein, told The Associated Press, adding that the cost of long-lasting goods rose last month, compared with a year ago, for the first time in about three years.

‘A Miracle’ To Spend Less Than $100

Families have cut spending on food as prices rise.

Cassidy Grom, 29, her husband, and his mother are eating out less and try to stretch grocery store rotisserie chickens as far as possible, using them in salads and the bones for soup.

“It feels like a miracle if I’m able to leave the grocery store without spending $100,” the Edison, New Jersey resident told The AP. “We’re trying to save for a house, we're trying to save for a family, so prices are really on our mind.”

Economists say the impact of tariffs was softened as consumers like the Groms curbed their spending.

“Inflation has begun to show the first signs of tariff pass-through,” Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, told Reuters. “While services inflation continues to moderate, the acceleration in tariff-exposed goods in June is likely the first of greater price pressures to come.”

Tariffs Impact Heavily-Imported Items

Right now, President Donald Trump’s baseline tariffs of 10 percent on most countries are affecting a range of goods. The import duty is higher on goods from China and Vietnam, at around 30 percent and 20 percent, respectively.

The White House pushed back on claims that the report showed a negative impact from tariffs, since the cost of new cars fell despite the 25 percent tariffs on autos and 50 percent tariffs on steel and aluminum. The administration also noted that despite the June bump in apparel prices, clothing prices are still cheaper than three months ago.

June inflation was driven by a range of higher prices, especially in the cost of heavily imported items like toys, up 1.8 percent in June, apparel, up 0.4 percent; furniture, up 1 percent; and video and audio products, up 1.1 percent. Prices on appliances, also influenced by tariffs, jumped for the third straight month.

Excluding the volatile food and energy categories, core inflation increased 2.9 percent in June from a year earlier, up from 2.8 percent in May. On a monthly basis, it picked up 0.2 percent from May to June. Economists closely watch core prices because they typically provide a better sense of where inflation is headed.

Grocery prices rose 0.3 percent from May to June, and cost 2.4 percent more than they did in June 2024. Some categories saw double-digit annual increases.

Here are some items that may give consumers sticker shock:

Coffee Could Cost Even More

Coffee prices saw a 13.4 percent year-over-year increase. Most of the coffee consumed in the U.S. is imported, primarily from Brazil and Colombia.

Both countries are subject to the 10 percent baseline tariff, and Trump has threatened Brazil with 50 percent tariffs over the trial of its former president, Jair Bolsonaro, who is charged with trying to overturn his 2022 election loss.

Last year, the U.S. imported nearly $2 billion worth of coffee from Brazil and $1.48 billion, according to the USDA.

Why Is Beef So High?

A steak to put on the grill costs 12.4 percent more than it did a year ago. Ground beef is 10.2 percent more expensive, and beef roasts are 9.8 percent more expensive.

Drought, high grain prices, inflation and rising interest rates have all made it less profitable to raise cattle. Many farmers and ranchers have culled their herds, or gotten out of the business entirely. The U.S. cattle inventory is the lowest it’s been since 1951, according to the USDA.

Demand for beef has remained strong among U.S. consumers, and that has led to high prices at the meat counter. Import taxes add more uncertainty.

The U.S. imported about 4.6 billion pounds of beef in 2024, with the bulk of it coming from Canada and Australia. Brazil, Mexico and New Zealand are also significant exporters of beef to the United States

Importantly, beef from Canada and Mexico is exempt from tariffs under the United States-Mexico-Canada Agreement, which took effect in 2020 and is subject to review in 2026.

Meat in general was more expensive, although there were exceptions: pork chops cost 2.1 percent less than a year ago, and lunch meats were down 2.3 percent.

Egg Prices Up 27.3%

Avian influenza continued to affect the price of eggs, which cost 27.3 percent more than they did in June 2024. A widespread culling of egg-laying hens reduced egg production, leading to supply shortages and high prices.

Commercial and backyard chicken flocks continue to be affected by avian influenza, according to the USDA. Notably, more than 5.1 million chickens in Arizona were euthanized due to three separate bird flu outbreaks in the spring. The recovery process is long. It takes about 19 to 20 weeks before hens in newly populated barns are ready to produce eggs, the American Egg Board told CBS News.

Egg prices are falling, though. The cost of a dozen eggs was down 10.8 percent from March to April, 12.7 percent from April to May, and 2.7 percent from May to June.

There are currently three active bird flu outbreaks, one in a commercial flock and two in backyard chickens, all in Pennsylvania.

Energy Costs Rise

Rising utility bills are putting pressure on household budgets, too. Energy costs are affected by multiple factors, including fossil fuel price volatility, surging electricity demand, and geopolitics.

Electricity costs increased another 1 percent from May to June, matching the rise in May. The continued surge resulted in a 5.8 percent annual increase in the cost of electricity.

Piped natural gas is 14.2 percent more than a year ago.

Gasoline prices rose 1 percent for the month, but remain 8.3 percent lower than last year.

Housing Costs Cool

Housing costs, a big inflation driver since the pandemic, have continued to cool, actually holding down broader inflation. The cost of rent rose 3.8 percent in June compared with a year ago, the smallest yearly increase since late 2021.

The owner-occupied housing equivalent was 4.1 percent. Rental and household insurance costs went up 4.8 percent.

College Textbooks Pricier

College textbooks are 10.2 percent higher than they were last year. The double-digit increase is outside the norm, but the cost of college textbooks typically increases every year.

According to Labor Bureau reports, the cost of new college textbooks has increased by about 6 percent a year since 2001, doubling or even tripling annual inflation, according to research. An analysis of Government Accountability Office reports shows that from 2002 to 2012, average textbook costs rose by 82 percent, while overall consumer prices increased by only 28 percent.

The cost of textbooks depends on the course and the student’s major. Hard copy books can cost as much as $400 each, with an average price of between $100 and $150, with the average student spending between $1,212 annually for books and supplies in the 2022-2023 academic year.

Some Items Were Cheaper

Some items got cheaper last month, including new and used cars, hotel rooms, and airfares. Travel prices have generally declined in recent months as fewer international tourists visit the U.S.

Many businesses built up a stockpile of goods this spring and were able to delay price hikes, while others likely waited to see if the duties would become permanent.

More businesses now appear to be throwing in the towel and passing on costs to consumers, including Walmart, the world's largest retailer, which has said it raised prices in June. Automaker Mitsubishi said last month that it was lifting prices by an average of 2.1 percent in response to the duties, and Nike has said it would implement “surgical” price hikes.

Federal Reserve Chairman Jerome Powell said last month that companies up and down the supply chain would seek to avoid paying tariffs, but that ultimately some combination of businesses and consumers would bear the cost.

“There’s the manufacturer, the exporter, the importer, the retailer, and the consumer, and each one of those is going to be trying not to be the one to pay for the tariff,” the Fed chair said. “But together, they will all pay for it together — or maybe one party will pay it all. But that process is very hard to predict, and we haven't been through a situation like this.”

Accelerated inflation could provide a respite for Powell, who has come under withering fire from the White House over interest rates.

The Fed chair has said that the duties could both push up prices and slow the economy, a tricky combination for the central bank since higher costs would typically lead the Fed to hike rates while a weaker economy often spurs it to reduce them.

The Associated Press contributed reporting.

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