The Federal Reserve Board published a FEDS Note analysing tariff-related retail price changes in 2025 using transaction-level spending data and product country-of-origin information. The note finds that tariff-related price pressure emerged gradually rather than as a one-time spike, with the largest effects concentrated in goods imported from China, where prices were up about 8.5% year on year by December 2025 and implied consumer pass-through of at least 30% from April to December 2025. The analysis constructs a quantity-weighted Fisher Price Index from item-level purchases by a representative panel of up to 200,000 US households (January 2018 to December 2025), and validates the resulting index against the Bureau of Economic Analysis Personal Consumption Expenditures food deflator. Country-specific indices are built by matching purchases to country-of-origin data, covering roughly 27,000 products and a limited subset of the broader consumption basket. Disaggregated results show year-over-year inflation on imported goods was close to zero through April 2025, then increased steadily for Chinese imports and rose to over 5% for products sourced from other countries by December, while US-produced goods averaged below 2% in 2025; an event-study framework suggests a delayed retail response after the April 2025 tariff announcements, with economically meaningful increases becoming more evident later in the year.

Original source View in tracker