{"id":333998,"date":"2025-08-10T20:24:10","date_gmt":"2025-08-10T20:24:10","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/333998\/"},"modified":"2025-08-10T20:24:10","modified_gmt":"2025-08-10T20:24:10","slug":"inflation-preview-cpi-to-rise-as-higher-tariffs-feed-through","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/333998\/","title":{"rendered":"Inflation preview: CPI to rise as higher tariffs feed through"},"content":{"rendered":"

US consumers probably experienced a slight pickup in underlying inflation in July as retailers gradually raised prices on a variety of items subject to higher import duties.<\/p>\n

The core consumer price index, regarded as a measure of underlying inflation because it strips out volatile food and energy costs, rose 0.3% in July, according to the median projection in a Bloomberg survey of economists. In June, core CPI edged up 0.2% from the prior month.<\/p>\n

While that would be the biggest gain since the start of the year, Americans \u2014 at least those who drive \u2014 are finding some offset at the gas pump. Cheaper gasoline probably helped limit the overall CPI to a 0.2% gain, the government\u2019s report on Tuesday is expected to show.<\/p>\n

Higher\u00a0US tariffs<\/a>\u00a0have started to filter through to consumers in categories such as household furnishings and recreational goods. But a separate measure of core services inflation has so far remained tame. Still, many economists expect higher import duties to keep gradually feeding through. \u00a0<\/p>\n

That\u2019s the dilemma for Federal Reserve officials who\u2019ve kept interest rates unchanged this year in hopes of gaining clarity on whether tariffs will lead to sustained inflation. At the same time, the\u00a0labor market<\/a>\u00a0\u2014 the other half of their dual policy mandate \u2014 is showing signs of losing momentum.<\/p>\n

As concerns build about the durability of the job market, many companies are exploring ways to limit the tariff pass-through to price-sensitive consumers. Economists expect government figures on Friday to show a solid gain in July retail sales as incentives helped fuel vehicle purchases and Amazon\u2019s Prime Day sale\u00a0drew in online shoppers<\/a>.<\/p>\n

Excluding\u00a0auto dealers<\/a>, economists have penciled in a more moderate advance. And when adjusted for price changes, the retail sales figures will likely underscore an uninspiring consumer spending environment.<\/p>\n

Among other economic data in the coming week, a Fed report is likely to show stagnant factory output as manufacturers contend with evolving tariffs policy.\u00a0<\/p>\n

A\u00a0preliminary trade truce<\/a>\u00a0between the US and China is set to expire on Tuesday, but a move to extend the detente is still possible.<\/p>\n

The Bank of Canada will release a summary of the deliberations that led it to hold its benchmark rate at 2.75% for a third consecutive meeting; it also left the door open to more cuts if the\u00a0economy weakens<\/a>\u00a0and inflation is contained. Home sales data for July will reveal whether sales gains continued for a third straight month.\u00a0<\/p>\n

Elsewhere, several Chinese data releases, gross domestic product readings for the UK and Switzerland, and a possible rate cut in Australia are among the highlights.\u00a0<\/p>\n

Asia<\/p>\n

Asia has a hectic data calendar, led by a wave of Chinese indicators, GDP reports from several economies, and a closely-watched rate decision in Australia. The week will see credit numbers from China, which will be assessed for signs that policymakers\u2019 efforts to revive economic growth are beginning to bear fruit. Money supply data will offer a complementary signal on underlying liquidity conditions.<\/p>\n

On Tuesday, the Reserve Bank of Australia is poised to lower policy rates for a third time this year after second-quarter inflation cooled further. A gauge of Australian business confidence due the same day will offer a timely read on sentiment heading into the second half. Wednesday brings Australia\u2019s wages data, followed by the employment report on Thursday.<\/p>\n

India reports CPI data on Tuesday, which will likely show prices cooled further in July from a year ago. Wholesale prices follow on Thursday, and will indicate whether cost pass-through remains muted.\u00a0<\/p>\n

Trade figures during the week will show how strong India\u2019s external sector was before Trump imposed an\u00a0additional 25% tariff<\/a>\u00a0on Indian goods over its ongoing purchases of Russian energy, taking the total import levy to 50%.<\/p>\n

On Wednesday, Thailand\u2019s central bank is expected to cut rates amid subdued price pressures and weak economic growth.\u00a0<\/p>\n

Thailand\u2019s King Maha Vajiralongkorn has endorsed the appointment of Vitai Ratanakorn as the nation\u2019s new central bank governor, capping a monthslong selection process that has been\u00a0overshadowed by concerns<\/a>\u00a0over government attempts to erode the autonomy of the Bank of Thailand. Vitai is set to take office from Oct. 1, according to a Royal Gazette notification issued Sunday.<\/p>\n

Also on Wednesday, New Zealand releases retail card spending data, South Korea publishes its unemployment rate for July, and Japan releases its producer price index \u2014 a gauge of wholesale inflation.<\/p>\n

China\u2019s big reveal comes on Friday, with a suite of July activity data including industrial production, retail sales, fixed asset investment, and jobless figures.\u00a0<\/p>\n

Also on Friday, Japan publishes preliminary estimates of second-quarter GDP, with forecasts suggesting the country likely avoided a recession.<\/p>\n

Singapore, Malaysia, Taiwan and Hong Kong are among the other economies reporting GDP, providing a broader look at growth momentum and external balances across the region.<\/p>\n