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Fed says businesses passing along tariff costs

Higher costs from tariffs were reported by businesses in all of the Federal Reserve’s 12 regional districts, and many made the choice to raise prices as a result.

© The Associated Press

“Many firms passed on at least a portion of cost increases to consumers through price hikes or surcharges,” the Fed’s July Beige Book — an anecdotal survey of domestic economic conditions — reported.

Those businesses that didn’t push the additional costs through to their customers saw restricted profit margins, the beige book said, noting consumers’ “growing price sensitivity.”

Inflation in the Labor Department’s consumer price index jumped in June, partly as a result of the tariffs.

While President Trump has instituted a 10-percent general tariff, along with China-specific tariffs and targeted tariffs on some individual goods, his country-specific “reciprocal” tariffs have been paused until Aug. 1 as trade negotiations continue.

Import prices advanced by 0.1 percent in June and deflated by 0.2 percent relative to last year, the Labor Department reported Thursday.

The number was below economists’ expectations and reflected lower energy prices.

The Hill's Tobias Burns has more here.

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