Despite tariffs, US able to keep lid on inflation

CPI up 2.4% in May from a year earlier

- COLBY SMITH

Businesses across the United States have for months warned that they would raise prices on their customers in response to President Donald Trump's tariffs.

The latest data show that it is only happening in a limited way so far, helping to keep a lid on inflation.

The consumer price index, released Wednesday, rose 2.4% in May from a year earlier, just above April’s 2.3% annual increase.

“Core” inflation steadied at 2.8%. That measure, which strips out volatile food and energy products, is closely monitored by policymakers as a gauge for underlying price pressures.

On a monthly basis, the overall measure rose 0.1%, while the core index rose 0.1%. Both were below economists’ expectations.

The latest data, released by the Bureau of Labor Statistics, reflects only the early impact of Trump's tariffs — the scope and scale of which have changed repeatedly since the president launched his global trade war. Tariffs are a tax on imports, and economists expect the effect on prices to become more pronounced over the summer as more businesses pass along higher costs to consumers, as many have said they will do.