Inflation rates in the United States remain steady in July, with a noticeable increase in core prices.
The suspension of data collection in several U.S. cities due to budget cuts and staffing shortages under the current administration has made the Consumer Price Index (CPI) data slightly more volatile month to month, but has not introduced bias into inflation measurements, according to officials at the Bureau of Labor Statistics (BLS).
The BLS, facing reduced budget and staff levels, halted survey collection in some cities (including locations in Nebraska, Utah, and New York) to better align workload with available research resources. Despite these reductions, experts such as Caldwell in Morningstar reports do not expect the survey cuts to distort inflation data, only marginally increasing volatility.
The July 2025 CPI reflected a 0.2% month-over-month increase in headline CPI and a 0.3% core CPI increase, with year-over-year increases stable at 2.7% and 3.1%, respectively. Therefore, while operational constraints impacted data gathering logistics, inflation statistics remained consistent and continued to show pressures from factors like tariffs, rather than from survey suspension effects.
The BLS uses different cell imputation when all prices are unavailable in the home cell. This method, considered by economists as higher quality, uses the average price of the same item in the same location as the missing product's price. The use of different cell imputation has grown from a share of only 8% in June 2024, and it jumped to 35% in June from 30% in May.
The Federal Reserve (Fed) tracks different inflation measures for its 2% target. Despite the changes in CPI data collection, the CPI in the U.S. remained unchanged at 2.7% year-over-year in July. Economists said that while these measures adopted by the BLS will not introduce bias in the CPI data, the volatility was a cause for concern.
Concerns over the quality of reports have been amplified due to budget cuts and staffing reductions. The BLS temporarily reduced the number of collected prices and rents used to calculate the CPI, and in some instances, completely suspended CPI data collection in certain cities.
Erika McEntarfer, the head of the Bureau of Labor Statistics (BLS), was fired by President Trump earlier this month. The CPI report was published amid concerns over the quality of inflation and employment reports.
In summary:
- Data collection suspension due to budget/staff cuts made CPI data slightly more volatile but not biased.
- BLS prioritized workload alignment and suspended some city surveys amid resource limits.
- Inflation trends remain consistent; July 2025 CPI showed modest increases expected before these issues.
- Analysts caution about marginal volatility but consider CPI reliable for policy and market decisions.
This assessment aligns with official BLS statements and market analysis from August 2025 reporting.
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