Inflation on Long Island ticks up slightly in July vs. 2024

U.S. inflation was unchanged in July as rising prices for some imported goods were balanced by falling gasoline and grocery prices, leaving overall prices modestly higher than a year ago.

Consumer prices rose 2.7% in July from a year earlier, the Labor Department announced on Tuesday, the same as the previous month and up from a post-pandemic low of 2.3% in April. Excluding the volatile food and energy categories, core prices rose 3.1%, up from 2.9% in June. Both figures are above the Federal Reserve's 2% target.

The new numbers suggest that slowing rent increases and cheaper gas are offsetting some impacts of President Donald Trump's sweeping tariffs. Many businesses are also likely still absorbing much of the cost of the duties. Tuesday's figures probably reflect some impact from the 10% universal tariff Trump imposed in April, as well as higher duties on countries such as China and Canada.

Brian Bethune, an economist at Boston College, said that overall U.S. tariffs — calculated as the amount of duties paid by U.S. companies divided by overall imports — have reached 10%, the highest in decades, and will likely keep rising for months.

“Those cost increases will be passed on to the consumer in some way, shape, or form,” Bethune said. Some companies could return to “shrinkflation,” he added, in which they reduce the package size of a good while keeping the price the same.

And companies that are absorbing tariff costs, which would cut into their profit margins, are less likely to hire new employees, he said.

On Long Island and in the New York metropolitan area, consumer prices rose 3.2% last month compared with July 2024. The year-over-year change was smaller than June's 3.5% and the smallest increase since February 2024, according to data from the Labor Department's Bureau of Labor Statistics.

The bureau's acting regional commissioner, Mark J. Maggi, said the consumer price index for the New York area, minus the volatile cost of food and energy, climbed 3.1%, year over year.

Like the national index, the New York index increased more slowly in July because of an 11.4% drop in the cost of gasoline, year over year, which offset price hikes for meat and eggs, school tuition and residential rents.

Locally, the cost of meat, poultry, eggs and fish rose 7.1% last month compared with July 2024. School tuition and residential rents were up 5.9% and 4.7%, respectively.

Tuesday's inflation statistics may put the Federal Reserve in a difficult spot when it comes to changing interest rates..

Hiring slowed sharply in the spring, after Trump announced tariffs in April. The stalling out of job gains has boosted financial market expectations for an interest rate cut by the central bank at its next meeting in September.

Economists are divided over how Fed officials will read the data in the coming months. Some argued that the worsening jobs picture will outweigh lingering inflation concerns and lead the Fed to cut at its next meeting in September. Yet some say that with core inflation notably above 2% and rising, the Fed will postpone that decision.

Chair Jerome Powell has warned that worsening inflation could keep the Fed on the sidelines — a stance that has enraged Trump, who has defied traditional norms of central bank independence and demanded lower borrowing costs.

Tariffs appeared to raise the cost of some imported items: Shoe prices jumped 1.4% from June to July, though they are still just 0.9% more expensive than a year ago. The cost of furniture leapt 0.9% in July and is 3.2% higher than a year earlier.

Tuesday's data arrives at a highly charged moment for the Labor Department's Bureau of Labor Statistics, which collects and publishes the inflation data. Trump fired Erika McEntarfer, then the head of BLS, after the Aug. 1 jobs report also showed sharply lower hiring for May and June than had previously been reported.

The president posted on social media Monday that he has picked E.J. Antoni, an economist at the conservative Heritage Foundation and a frequent critic of the jobs report, to replace McEntarfer.

Newsday's James T. Madore contributed to this story.