A key official in the Trump administration's economic team touted the July CPI inflation report as evidence that tariff-induced inflation isn't going to materialize as economists fear.

Donald Trump continued to rage at media figures overnight, this time former New York Times columnist Paul Krugman. Trump wrote on Truth Social late Sunday, “Paul Krugman of the New York Times has been predicting Doom and Gloom ever since my great election success in 2016. In other words, he has been wrong for YEARS, …

A gauge of underlying inflation in July showed prices increasing at the fastest annual pace in five months, a sign that businesses are passing along tariff-related costs to customers.

The Labor Department’s consumer price index for July showed that the annual pace of inflation remained at 2.7 percent from July 2024. That’s the same as the annual rise reported in June and above April’s post-pandemic low of 2.3 percent, though it was just under economists’ expectations.

Economists have warned for months about rising inflation due to U.S. tariffs, but like the recent tsunami warnings from the Kamchatka earthquake, the danger has not come to pass. Until now.

U.S. consumer prices increased moderately in July, though rising costs for services such as airline fares and some tariff-sensitive goods like household furniture caused a measure of underlying inflation to post its largest gain in six months.