Inflation in the U.S. stayed steady at 2.7% in July 2025, but prices are still rising for some items, especially those affected by new tariffs. Core inflation, which leaves out food and energy prices, rose to 3.1%, showing that the cost of many everyday goods is still going up. This is partly due to a 10% tariff announced earlier in the year by President Trump that applies to most imported goods, along with extra tariffs on certain countries. As a result, companies are starting to raise prices to cover their higher costs. At the same time, the job market is slowing down, with fewer jobs being added in July. All of this is causing some uncertainty for the economy and could affect interest rates and your spending power.

In mid-2025, the U.S. economy is facing a tough mix of high inflation, slower job growth, and uncertain trade policies, making it harder for many Americans to manage their money. Even though some economic numbers look good on the surface, rising prices are cutting into people’s purchasing power—a problem experts call “money illusion.” At the same time, the Federal Reserve is keeping interest rates high to fight inflation, which makes loans and mortgages more expensive. This, along with rising unemployment and unstable stock markets, is pushing more people to look for second jobs, switch careers, or ask for raises just to keep up. Adding to the pressure is the unclear future of international trade, as the U.S. has only temporarily extended its tariff truce with China, leaving many unsure of what comes next.