Consumer Price Index reports in recent months have provided clear indications that prices for tariff-impacted goods are on the rise.
Economists have been watching the “core goods” category (which excludes gas and food) for signs of tariff-related costs being passed along to consumers. In August, core goods prices rose 0.3%, its highest rate in seven months.
“The tariff impact is increasingly visible, though pass-through remains gradual and uneven,” wrote Gregory Daco, chief economist at EY-Parthenon, in an analyst note Thursday about inflation.
Some of the categories with the biggest monthly price leaps in August were those heavily imported and highly exposed to tariffs: Sewing machines, fabric and supplies (+9.1%); jewelry (+6.8%); women’s outerwear (+4.4%); instant coffee (+4.9%); tomatoes (+4.5); beverage materials including coffee and tea (+2.8%); bananas (+2.1%).
“Looking ahead, inflationary pressures are likely to persist as tariffs continue to filter through, but the pace of acceleration should remain contained relative to the recent post-Covid experience,” Daco wrote.
Stubborn inflation is contributing to a K-shaped economy, where consumer spending is concentrated in higher-income households, with lower-income tiers pulling back on their shopping due to “muted pay increases and mounting financial strain,” Daco noted.
Morning Consult said in a note this week that an October survey showed the share of adults not noticing tariff-related price increases had fallen to “a new low of 8%” this month.
