Despite fears that tariffs would cause consumer goods prices to rise, the U.S. inflation rate remained relatively steady in May, according to data from the Bureau of Labor Statistics.
According to new data released on Wednesday, the Consumer Price Index rose 2.4% in the 12-month period ending in May. The inflation rate is just 0.1 percentage points higher than April's rate of 2.3%, which marked the lowest year-over-year inflation rate since 2021.
Wednesday's release of the Consumer Price Index indicates that President Donald Trump's new tariffs have yet to impact the broader economy, as many economists predict that prices on consumer goods could rise in the coming months.
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Last week, the Budget Lab at Yale University said Trump's tariffs would raise prices by almost 1.3% in the short run, costing the typical middle-class household more than $2,100 per year.
The report indicates that Trump's tariffs disproportionately affect textile imports. In the near term, consumers face 31% higher prices for shoes and 28% higher prices for apparel, the Yale report says. However, the updated Consumer Price Index noted that apparel prices in May 2025 were actually lower than those in May 2024.
Currently, Trump has implemented a 10% duty on most imports, along with a 50% tax on steel and aluminum products.
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The Consumer Price Index weighs the costs of goods based on their importance; items like food, shelter, and energy tend to be weighted more heavily.
Over the last decade, prices have generally increased at a rate of 3.2% per year. Over the last 20 years, consumer inflation has typically risen by 3% annually. The Federal Reserve, however, has aimed to keep annual inflation at approximately 2%.
