Prices rose 0.1% overall in May, according to the latest consumer price index. That was actually less of an increase than we saw in April. Tariffs, it seems, still haven’t hit the numbers in a big way.
If you’re a retailer, there are some things you can store, and some thing you just can’t.
“We usually keep a prettly large pile of green coffee inventory,” said Nicole Vitello, vice president of Equal Exchange, a worker owned co-op that brings things like coffee and bananas from small farmers to stores. “We roast and package coffee here at our facility in Massachusetts.”
Vitello was able to bring in some coffee before 10% tariffs hit and store it, blend it and problem solve, “so we can be judicious about how we do a cost increase,” she said.
Overall in the U.S., coffee went up 1% in May. Bananas do not work that way.
“Obviously, we cannot stockpile fresh bananas which, you know, we don’t even make — 10% is basically our whole margin,” she said.
So those prices had to go up. On average in the U.S., bananas got more than 3% more expensive in May. But it’s not just perishables that went up.
“Major appliances went up almost 4.5% in May,” said Omair Sharif, president of Inflation Insights.
Appliances have had China tariffs since February and it’s starting to show up. But other things we import from China, like furniture, have actually come down.
“Some of this has to do with retailers just trying to move merchandise out the door. I think, in part because there’s a concern that the economy is going to slow down even more as we get into the second half of the year” Sharif said.
Meanwhile, gas prices are down 12% in a year — to pre-covid levels — and rent inflation has been on a slow trek downward.
“Many private sector data on apartment rents are showing essentially no change from one year ago,” said Lawrence Yun, chief economist at the National Association of Realtors.
But tariff price increases on goods are coming, and according to Inflation Insights, should hit around August. Because even for the stockpilers, the price hikes are already here.
“So the coffee we’re buying from Guatemala, Colombia, Honduras, you know, has been, on average, an additional $20,000 per container,” said Vitello at Equal Exchange.
In the eight weeks since the tariffs have hit, they’ve cost the company $250,000. They can’t eat all that.
