The latest measure of consumer inflation shows prices are rising, and according to a Yale University analysis, increased costs from tariffs implemented by President Donald Trump could push thousands of Americans into poverty.
The Yale Budget Lab estimates that new 2025 tariffs could increase the number of Americans living in poverty by 650,000 to 875,000, depending on the method used to measure poverty.
The analysis assumes that incomes from jobs will remain steady despite higher tariffs. It also accounts for government programs, such as Social Security, that adjust payments based on inflation.
Yale economists say the current U.S. tariff rate is 17.4%, the highest since 1935. The report projects that the average U.S. household will lose about $2,300 a year because of tariffs.
Tariffs are taxes charged to companies importing products into the United States. The rate varies depending on the country of origin and the type of product.
While some companies tried to absorb the cost of tariffs early in Trump’s presidency, more now say those costs will ultimately be passed on to consumers.
Trump says the tariffs are intended to revive U.S. manufacturing jobs and reduce the nation’s trade deficit with other countries.
According to new data released on Thursday, the consumer price index increased to at 2.9% in the 12-month period ending in July. It was at 2.7% for the 12-month period ending in June and July. The inflation rate is 0.5 percentage points higher than May's rate of 2.4%, and 0.6 percentage points higher than April's consumer price index, which marked the lowest year-over-year inflation rate since 2021.
The consumer price index weighs the costs of goods based on their importance; items like food, shelter, and energy tend to be weighted more heavily.
