U.S. inflation stays cool in May, challenging predictions of tariff-driven price surge

By lauraharris // 2025-06-15

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U.S. consumer prices rose just 0.1 percent in May, continuing a four-month trend of modest inflation and challenging predictions that tariffs would sharply raise costs.
Falling gas prices – down 2.6 percent in May and 12 percent year-over-year – helped keep overall inflation in check, while food and service prices saw only moderate increases.
Durable goods, apparel, vehicles and other sectors expected to be affected by tariffs showed flat or declining prices, weakening claims of tariff-driven inflation.
The data support Trump's long-held position that tariffs can protect U.S. jobs and industries without sparking inflation, causing some economists to reconsider prior assumptions.
Trump continues to advocate for broad tariffs of 10 percent on imports, arguing they encourage domestic investment – a stance gaining new traction as inflation remains controlled.

Consumer prices in the United States rose only slightly in May, extending a streak of subdued inflation and casting doubt on long-standing warnings that President Donald Trump's trade policies would trigger widespread price hikes for American households. According to the Department of Labor, the Consumer Price Index (CPI) increased just 0.1 percent last month, marking the fourth consecutive month of modest inflation. Core prices, which exclude food and energy, also climbed 0.1 percent, well below economists' expectations of a 0.3 percent jump. On an annual basis, overall prices are up 2.4 percent, while core inflation is running at 2.8 percent – moderate levels amid persistent global inflationary pressures. The data appears to bolster the Trump administration's argument that its tariff-heavy approach to trade and economic restructuring is not fueling the inflation many had feared. Energy prices were a major contributor to the continued softness in inflation. Gasoline prices dropped 2.6 percent in May and are down 12 percent compared to a year ago. Grocery prices edged up 0.3 percent, reversing a decline in April, while restaurant meals also rose 0.3 percent, bringing the annual gain for dining out to 3.8 percent. Durable goods, widely seen as vulnerable to trade tensions, saw a slight 0.1 percent decline in May. Compared to last year, prices in this category are flat. Non-durable goods fell 0.3 percent, with non-food items dipping 0.9 percent. New vehicle prices dropped 0.3 percent, and used cars continued their recent slide, falling 0.5 percent. Even apparel, another tariff-sensitive sector, recorded a second straight monthly price decline. Footwear prices for both men and women also ticked downward. Some sectors did experience limited price growth. Furniture prices increased 0.3 percent in May, following a 0.2 percent uptick in April. Appliances rose for the second month in a row, up 0.8 percent again, but remain 0.8 percent cheaper than a year ago, suggesting the recent rise may simply be a rebound from previous declines. In the tech space, smartphone prices continued to drop, while computer prices surged 1.1 percent in May. Despite the monthly increase, computer prices are still down 3.5 percent from the previous year. Service sector inflation remained muted, with core prices excluding energy rising a modest 0.2 percent. Stripped of residential rent, that figure held steady. The report is likely to reshape economic and political narratives. Critics of the administration had warned that the president's aggressive trade agenda, marked by tariffs on goods from key trading partners, would drive up costs. But the latest data paints a different picture, as consumer prices remain tame across most sectors.

Trump is right: Tariffs won't drive up consumer prices

Trump has long argued that his economic strategy, including a broad reworking of trade agreements and the implementation of targeted tariffs, would not drive up consumer prices. During his 2024 presidential campaign, Trump first imposed the idea of a broad tariff of 10 to 20 percent on all imported goods to encourage investment within the United States and strengthen domestic manufacturing. (Related: Trump vows to fight inflation and cut energy costs if reelected.) "It's going to have a massive effect – positive effect. It's going to be a positive effect," Trump said in an interview at the Economic Club of Chicago in October during his 2024 presidential campaign. "It must be hard for you to spend 25 years talking about tariffs as being negative and then have somebody explain to you that you're totally wrong." Trump sees tariffs as a tool to shield American industries and preserve U.S. jobs, even though his critics view the exact opposite. "The higher the tariff, the more likely it is that the company will come into the United States and build a factory in the United States so it doesn't have to pay the tariff," Trump said in Chicago in October. Now, the latest inflation figures lend weight to that argument, prompting economists to reassess earlier assumptions about the inflationary effects of tariffs on imported goods. Follow Trump.news for more news about his second administration. Watch the video below about President Donald Trump vowing to bring prices way down during his 2024 presidential campaign.

This video is from the NewsClips channel on Brighteon.com.

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Trump is right: Tariffs won't drive up consumer prices

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