Inflation holds steady as data shows how prices are faring after Trump’s ‘Liberation Day’ tariffs
Inflation held steady last month, according to data that gives the first glimpse of how prices are faring since President Donald Trump’s sweeping “Liberation Day” tariffs.
Consumer prices rose 0.1 percent on a monthly basis in May, while annual inflation stood at 2.4 percent, according to the Department of Labor’s consumer price index.
The report captures the period after Trump unveiled his global reciprocal tariffs in April and provides insight as to whether businesses are bearing the brunt of the duties themselves or passing them on to customers.
Since Trump announced his global reciprocal tariffs and the stock market was spooked, many of the duties were paused. However, 10 percent tariffs for most countries remain.
Economists said that the reduction in the scale of some trade tariffs may have “helped to restrain cost increases thus far,” Wells Fargo’s Sarah House and Nicole Cervi said. “That said, as the higher tariff regime persists, shielding consumers from the costs is likely to become more challenging,” the economists added.
“Only a few goods prices likely rose as a result of the new tariffs in May,” Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a note, Bloomberg reports. “June will be a different story — while some providers of discretionary services probably cut prices or kept them low to sustain demand.”
Walmart warned customers last month that they could see price rises because of the trade tariffs. The retailer’s chief financial officer John David Rainey said that the tariffs are “still too high.”
“It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices,” he said. “You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”
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