U.S. inflation accelerated in July as the consumer-price index rose 2.7% from a year earlier, according to Bureau of Labor Statistics data released this week. Core CPI, which strips out food and energy, increased 0.3% on the month—one of the largest gains this year—driven largely by a pickup in prices for core goods that economists attribute in part to President Donald Trump’s sweeping tariff increases imposed earlier this year. While headline numbers remain relatively contained, analysts see early signs of cost pass-through. Economists at Pantheon Macroeconomics and High Frequency Economics said wholesalers are absorbing much of the duties for now, but point to rising import prices as evidence that pressures are building in the pipeline. The debate is intensifying: some analysts blame the tariffs, while others, including Moody’s Mark Zandi, highlight labor shortages linked to tighter immigration policies for pushing up service costs in logistics and agriculture. Consumer demand has held up for the moment. Commerce Department figures showed retail sales advancing 0.5% in July to $726.3 billion, buoyed by autos and furniture. Still, inflation-adjusted spending has been essentially flat over the past four years, and the University of Michigan’s preliminary August survey found sentiment slipping to 58.6, with one-year inflation expectations jumping to 4.9%. Investors will get a clearer read on how much of the tariff burden is reaching shoppers when major retailers including Walmart and Target report quarterly results next week. Their commentary on margins and pricing is expected to shape market expectations for the durability of consumer spending as the tariff regime and broader inflation pressures evolve.