LiveUpdated Aug. 12, 2025, 7:31 a.m. ETThe Consumer Price Index for July is expected to reflect an uptick in inflation as companies increase prices as a result of tariffs.ImageIn the aisle of a grocery store in Westlake, Fla. Americans have become choosier about how they spend.Credit...Scott McIntyre for The New York Times PinnedUpdated Aug. 12, 2025, 6:59 a.m. ETColby SmithColby Smith covers the U.S. economy and the Federal Reserve.Inflation probably sped up in July as President Trump’s tariffs rekindled price pressures across a wider range of consumer goods.The Consumer Price Index, which will be released on Tuesday at 8:30 a.m. Eastern, is forecast to have risen 2.8 percent from the same time last year. That would be the fastest annual acceleration in five months.Underlying inflation, tracked by a “core” measure that strips out volatile food and energy prices, is expected to have jumped 0.3 percent over the course of the month, translating to a 3 percent annual pace. In June, core inflation rose 0.2 percent from the previous month, or 2.9 percent from July 2024.The July data, which will be released by the Bureau of Labor Statistics, could provide the clearest sign to date that businesses are more readily passing along tariff-related costs to their customers after a prolonged period in which price gains were muted.U.S. companies that import products have largely been able to hold off raising prices despite a universal 10 percent tariff that has been in place on all imports since April, along with higher levies on steel, aluminum and products from China and Canada. Mr. Trump’s more punishing tariffs on individual countries went into effect on Aug. 7 so will not be reflected in the July data.Businesses have managed to avoid passing along price increases because of a strategy earlier in the year to stockpile goods that were likely to be subject to Mr. Trump’s levies. Many companies have also sought to absorb the costs themselves in order to avoid driving away customers, some of whom are increasingly under financial strain.But the July data is expected to show that many businesses have reached a tipping point and are left with little option but to raise prices further following June’s notable uptick. The biggest impact is likely to be in categories such as furniture, appliances, and other household wares as well as recreation goods and footwear.New and used car price increases have been relatively subdued as carmakers have shielded their customers from Mr. Trump’s duties rather than forcing them to bear the brunt of the higher costs. But economists worry that this reprieve will soon end, dampening already slowing demand.Americans have become choosier about how they spend, helping to depress airline fares, hotel fees and other services-related costs. Hiring across the country has sharply slowed in recent months, keeping a lid on wage gains. July’s jobs report showed just 73,000 jobs added for the month, and gains registered in May and June were revised down by an unusually high total of 258,000 positions. Companies have yet to lay off workers in droves, but economists worry that they will be forced to cut back on costs as tariffs continue to eat into their margins.Tuesday’s data will be important for the Federal Reserve, which is facing a challenging economic situation in which prices are rising while the labor market is weakening. It is a difficult backdrop given the Fed’s duty to keep inflation low and stable while also ensuring that unemployment does not rise too much. Officials at the central bank have kept interest rates steady since the start of the year as they have sought more clarity on how Mr. Trump’s policies, including tariffs, would impact the economy.That approach has attracted significant criticism from the president, who has taken to insulting Jerome H. Powell, the chair of the central bank, directly as well as the powerful Board of Governors that he heads.Mr. Trump last week announced that he would install a temporary governor to join the board, which votes on interest rates at every policy meeting. A vacancy unexpectedly opened up at the start of the month when Adriana Kugler, a governor, announced she was leaving before her term was set to expire at the end of January. The president tapped a longstanding critic of the Fed, Stephen Miran, who most recently served as chair of Mr. Trump’s Council of Economic Advisers.Mr. Miran, who still needs to be confirmed by the Senate, will join a group of Fed officials who have started to splinter over the right time to restart interest rate cuts that were paused in December. Two policymakers, previously appointed by Mr. Trump, have already called for the Fed to cut interest rates.More policymakers appear to be joining that camp following the most recent data that showed far less monthly jobs growth since the start of the summer than initially expected. But signs that inflation is accelerating more than is already forecast could disrupt any plan to lower interest rates at the central bank’s next meeting in September. Earlier this summer, Mr. Powell conceded that were it not for tariffs, the Fed likely could have reduced borrowing costs already.July’s inflation report is also the first big economic data release from the Bureau of Labor Statistics since Mr. Trump fired its head after the weaker-than-expected jobs report. Economists decried that move, warning that any attempt to undermine what has always been considered reliable, independently produced statistics from the government agency would be economically and financially damaging.Aug. 12, 2025, 7:31 a.m. ETToday’s report on inflation is the first major release from the Bureau of Labor Statistics since Trump fired its leader following a weak jobs report, citing unsubstantiated claims that the data had been “rigged.” Late Monday, the president announced he would nominate E.J. Antoni, an economist at the conservative Heritage Foundation, to serve as the next commissioner of B.L.S. To take the post, Antoni requires Senate confirmation. Many economists have expressed alarm about the potential politicization of the statistics agency.Aug. 12, 2025, 7:30 a.m. ETRecent revisions to the number of jobs created has provoked President Trump’s ire.Credit...Win Mcnamee/Getty ImagesPresident Trump announced on Monday that he would nominate E.J. Antoni, an economist at the conservative Heritage Foundation, to lead the Bureau of Labor Statistics. Mr. Trump fired the previous commissioner of the agency after it reported weak job growth.Dr. Antoni, who would need to be confirmed by the Senate, has previously criticized the bureau and questioned its methods and reports. His nomination underscored Mr. Trump’s attempts to place his own allies in control of a key repository of data about the nation’s hiring, wages and prices.Earlier this month, Mr. Trump fired the previous commissioner, Erika McEntarfer, who was confirmed on a bipartisan basis to the post in 2024. Without evidence, the president claimed that Dr. McEntarfer had “rigged” the federal hiring data to harm him politically.The firing raised concerns about how Mr. Trump might handle future releases of economic data, with the latest monthly report on consumer prices scheduled for Tuesday.Dr. Antoni, who serves as the Heritage Foundation’s chief economist, previously has echoed some of Mr. Trump’s concerns. The agency routinely revises job growth figures as it tries to refine preliminary data that is often imperfect. While most economists expect such revisions, Mr. Trump and his allies have seized on them as an indication that the data is being manipulated.“There are better ways to collect, process, and disseminate data — that is the task for the next B.L.S. commissioner, and only consistent delivery of accurate data in a timely manner will rebuild the trust that has been lost over the last several years,” Dr. Antoni posted on X last week.Aug. 12, 2025, 6:58 a.m. ETA FedEx delivery driver in New York. Companies have recently had to contend with a series of tariff delays, fresh threats and haphazard deals.Credit...DeSean McClinton-Holland for The New York TimesFor manufacturers, retailers and other businesses that rely on imported goods, President Trump’s tariff policy has become an exercise in forbearance. Since the spring, companies have had to contend with a series of delays, fresh threats and haphazard deals that have scrambled their ability to make long-term decisions.“We kind of saw this summer as a holding period for a lot of firms,” said Courtney Shupert, an economist at MacroPolicy Perspectives. “Firms were saying, ‘Let’s wait and see if demand is going to be stronger or weaker.’”But now that many of Mr. Trump’s tariffs have officially set in and his trade policy seems to be solidifying, many companies are concluding that they can no longer afford to hold back.How quickly businesses act could have wide-ranging implications for the economy. Should more companies decide to pass on price increases to consumers, that could push up inflation and chill consumer spending.Many companies in recent months also hesitated to fire, or hire, workers amid the tariff unpredictability, reminiscent of the labor hoarding after the worst of the pandemic. If companies begin to have more confidence in the tariff rates, that moratorium could break. Indeed, the latest jobs report from the Labor Department, suggested that businesses might be closer to that tipping point than previously thought.