US CPI Data for June Surprises Markets

The Consumer Price Index for All Urban Consumers (CPI-U) rose 2.7% over the 12 months ending June, up from 2.4% in May. Excluding food and energy, the index increased by 2.9% over the same period.

In June, the CPI-U increased by 0.3% on a seasonally adjusted basis, following a 0.1% rise in May. The all-items index rose by 2.7% over the last 12 months before seasonal adjustment.

The index for all items excluding food and energy went up by 0.2% in June, compared to a 0.1% increase in May.

Core consumer prices in the United States increased by 2.90% in June 2025 compared to the previous year. The annual inflation rate in the US accelerated to 2.7% in June 2025, the highest level since February.

On a monthly basis, the CPI increased by 0.3%, with the largest upward pressure coming from shelter prices and gasoline costs. Core inflation, which excludes food and energy prices, rose to 2.9% in June.

The US Fed has suspended rate cuts since December, with Fed Chair Powell preferring to wait and see. Economists hold varying views on the impact of tariffs on inflation, with predictions that tariffs could drive annual inflation to 3.8% by December.

President Trump has announced tariff increases on Canadian and EU imports, with concerns about the impact on inflation and the stock market. Walmart's CEO warned that tariffs could lead to price increases despite recent reductions in charges on China.

While US CPI data is important, central bankers use the core measurement in the Personal Consumption Expenditures price index as their benchmark. The June US jobs report showed stronger than expected job growth, primarily driven by government employment.

According to the source: financialexpress.com.