The Labor Department will release its latest monthly inflation report on Tuesday at a critical time for the economy, as the Federal Reserve will take stock of the impact of tariffs on consumer prices ahead of its interest rate decision next month.
The Bureau of Labor Statistics (BLS) will release the consumer price index (CPI) for July on Tuesday morning, which is expected to show inflation ticking higher from the previous month and moving further away from the Federal Reserve's 2% longer-run target.
Goldman Sachs economists led by Jan Hatzius projected that headline CPI inflation will rise to 2.8% on an annual basis, in line with the consensus and up from the 2.7% reported last month. Core inflation, which excludes volatile costs such as those for food and energy, is projected to rise to 3.08%, up from 2.9% reported last month.
The Goldman forecast also projected that several tariff-affected product categories will contribute to the rise in inflation, contributing about 0.12% to the projected monthly CPI rise. The categories with tariff-related price boosts in July include furniture, auto parts, apparel, recreation, personal care, communication and education.
Going forward, the Goldman Sachs economists wrote that they "expect tariffs to continue to boost monthly inflation and forecast monthly core CPI inflation between 0.3-0.4%."
At the end of 2025, they expect year-over-year core CPI inflation to rise to 3.3% in December – which the economists noted would be 2.5% when excluding the effects of tariffs – while headline CPI inflation will rise to 2.9% annually by year's end in their forecast.