July's Consumer Price Index (CPI) report indicates that inflation is cooling more than expected, providing a boost to stock futures and placing greater weight on the U.S. dollar.
Consumer prices rose 2.7 percent in the 12 months since last July. This matched the 12-month period since June and came in below the expected rate of 2.8 percent. Core CPI, often considered a more accurate reading of long-term trends in the economy, rose .3 percent and 3.1 percent from a year ago.
Shelter costs ticked up 0.2 percent, accounting for most of the index’s gain, according to the BLS. Food prices held steady, while energy prices dropped 1.1 percent. Even CNN couldn't spin the good news for President Trump:
🚨 CNN: "Energy FELL... that was largely driven because of gas prices falling in the month of July."
— Rapid Response 47 (@RapidResponse47) August 12, 2025
"Look at that food! This is where people spend their money... flat — 0% — and actually DOWN at the grocery store." pic.twitter.com/2f6NDXjHBc
New vehicle prices, often sensitive to tariffs, were unchanged, but used cars and trucks climbed 0.5 percent. Transportation and medical care services each rose 0.8 percent.
Stock market futures posted gains following the announcement, while Treasury yields fell.
Household furnishings and supplies rose 0.7 percent after a 1 percent jump in June. Apparel inched up 0.1 percent, and core commodities gained 0.2 percent. Canned fruits and vegetables prices, typically imported and tariff-sensitive, were unchanged.
Former White House economist Jared Bernstein said on CNBC: “The tariffs are in the numbers, but they’re certainly not jumping out hair on fire at this point."
This is the first major release of data since President Trump fired Erika McEntarfer, the head of the Bureau of Labor Statistics (BLS), following weak reports, which he claimed were rigged. To replace her, Trump said on Monday he would nominate E.J. Antoni, the chief economist at the Heritage Foundation, (and Townhall contributor) who received his PhD in economics from Northern Illinois University. He is a long-time critic of the BLS.