Rising Prices: Which Goods and Services Are Driving Inflation?
Inflation accelerated in June, according to the latest CPI data, as rising costs for housing remain an overhang.


Karee Venema
U.S. consumer price inflation accelerated in June, with the Consumer Price Index (CPI) showing price increases for a broad range of goods and services.
According to the latest CPI report, headline inflation was up 0.3% month over month in June, faster than May's 0.1% increase but matching economists' forecast for a 0.3% increase.
The June CPI was 2.7% higher year over year, an uptick from the 2.4% rise seen the month prior and in line with economists' projections.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Core CPI, which excludes volatile food and energy prices and is seen as a better measure of underlying inflation trends, rose 0.2% month over month and 2.9% year over year. Both figures were higher than what was seen in May but in line with economists' forecasts.
"With the bulk of tariffs on hold for a bit longer, the June CPI report remained fairly tame," says Melissa Brown, head of Investment Decision Research at SimCorp.
But she adds that having a positive or negative viewpoint on the print likely depends on what you're planning on buying or selling.
"If you are planning a vacation, lower airfare is positive, but if you are staying home and redecorating, higher furniture prices look discouraging," Brown notes. "Yes, egg prices are lower than they were last month, but other food costs are higher."
CPI is still above the Fed's 2% target
Despite the in-line data, the bottom line from the June CPI report is that prices are still rising faster than consumers and the Fed would like.
Between 2000 and 2020, annual inflation in the U.S. averaged just 2.1%. (Recall that the Federal Reserve's inflation target is 2%.)
Perhaps we didn't appreciate it enough at the time, but the first two decades of the 21st century were a sort of Goldilocks era for inflation: not too fast and not too slow.
Just have a look at some of the subcategories in the latest CPI report to see how much things have changed. Below, we highlight the goods and services that are weighing most heavily on folks' finances.
Rising prices: where inflation is hitting hardest
Grocery prices were on the rise in May, as three categories saw increases.
Notably, the index for nonalcoholic beverages rose 1.4% in June as coffee prices jumped. The fruits and vegetables index was also on the rise as the price of citrus fruits surged 2.3%. The index for other food at home also increased.
However, the indexes for cereals and bakery products and dairy and related products declined. The meats, poultry, fish, and eggs index also fell as a 10.8% drop in egg prices offset a 2.4% increase in beef and veal.
The food away from home category, which includes meals at restaurants and bars, rose 0.4% in June after gaining 0.3% in May.
Another contributor to inflation was electricity, which was up 1.0% on the month. This contributed to an increase in overall energy costs, as did a rising prices for gasoline and natural gas.
Housing costs, or the shelter index, also remained sticky and lifted inflation last month.
"The index for shelter rose 0.2 percent in June and was the primary factor in the all items monthly increase," the Bureau of Labor Statistics said. "The index for owners' equivalent rent rose 0.3 percent in June and the index for rent increased 0.2 percent."
Elsewhere, prices for household furnishings (+1.0%) and apparel (+0.4%) increased in June, while medical costs were also on the rise. Indeed, the medical care index was up 0.5% due to higher prices for hospital services and prescription drugs.
There was some good news for consumers in the June CPI report: Prices for airfare and new and used cars were all lower last month.
Where inflation goes from here is hard to say as forecasters brace for a bigger impact from President Trump's tariffs.
"Businesses can respond to the tariff increases by raising prices or eating the added costs, and we will most likely see a mix of the two. The CPI increases show the amount that is being passed on to consumers so far," says Steve Dean, chief investment officer at Compound Planning.
Dean adds that many businesses built up inventory levels and consumers front-loaded major purchases to soften the impact of tariffs.
But the fact remains that we "don't know what the exact level and timing of tariffs will be," and this, Dean says, creates uncertainty for both companies and consumers.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
- Karee VenemaSenior Investing Editor, Kiplinger.com
-
New Trump Gambling Losses Deduction Limit: Who Pays More Tax in 2026?
Tax Changes A gambling loss tax deduction change in Trump’s “Big Beautiful Bill” is causing an uproar. Here’s what you need to know.
-
Could a Micro-Retirement Be the Refresh You Need?
Don't wait until you turn 65: Why more people are taking "micro-retirements," or short, strategic breaks, years before they retire.
-
What Will the Fed Do at Its Next Meeting?
Rate cuts remain on hold this summer, experts say.
-
Take It From a Tax Attorney: This Is a Magic Multimillion-Dollar Tax-Saving Strategy
The qualified small business 1202 stock exemption is a $10 million exclusion that seems too good to be true and is often overlooked.
-
What Would You Like to Leave Behind? A Financial Planner's Guide to Family Wealth Discussions
Communicating about your assets and plans for passing them on increases clarity while preventing surprises and family disputes.
-
The Dollar Index Is Sliding. Is Your Portfolio Prepared?
The dollar's fall has been troubling because inflation appears to be constrained and the economy has been strong. Here's what it means for investors.
-
Seven Financial Considerations When Downsizing for Retirement
With prices going up on everything, you may be looking for a cheaper place to live. To truly evaluate costs, take a hard look at taxes and intangibles.
-
I Have Plenty of Money: Why Do I Need a Long-Term Care Plan?
Long-term care planning, whether through insurance or self-funding, is crucial not only for financial protection but also to preserve family relationships and reduce the emotional and logistical burdens on loved ones.
-
The GENIUS, CLARITY, and Anti-CBDC Acts: What Bitcoin Investors Need to Know
Movement on the crypto front at the federal level has the potential to usher in substantial change. Here's what it means for your portfolio.
-
Wellness Stocks to Invest in Now
Breakthroughs that help us live longer, healthier lives can also create opportunities for investors.