U.S. inflation was unchanged in July while a measure of underlying inflation rose to its highest level in five months as tariffs push the price of imported goods higher while gas and grocery prices cooled.

Consumer prices rose 2.7 per cent in July from a year earlier, the Labor Department said Tuesday, the same as the previous month and up from a post-pandemic low of 2.3 per cent in April. Excluding the volatile food and energy categories, core prices rose 3.1 per cent, up from 2.9 per cent in June. Both figures are above the Federal Reserve’s 2 per cent target.

The figures suggest that slowing rent increases and cheaper gas are offsetting some impacts of President Donald Trump’s sweeping tariffs. Many businesses are also absorbing some of the cost of the duties. Tuesday’s figures like

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