The takeaway

When tariffs were relatively stable, prices for durable goods such as appliances, electronics, and furniture were declining by as much as 3% year-over-year. But in 2025, the effective tariff rate surged to over 11% and durable goods prices began increasing by 2% to 3%.

Dramatic shifts in durable goods prices and trade policy

In our FRED graph above, the solid blue line shows the year-over-year percent change in durable goods prices, and the dashed green line shows the effective tariff rate on imports. (Btw, the effective tariff rate is total tariff revenue collected by the government divided by the total value of all imported goods.)

For most of the period shown, durable goods prices were actually falling. Deflation was the norm from mid-2023 through early 2025, with prices declining by as much as 3% year-over-year. Meanwhile, effective tariffs remained relatively stable at around 2.5% through 2024.

The picture changed sharply in 2025. The effective tariff rate surged from roughly 2.5% to over 11%, more than quadrupling in about a year. Shortly after, durable goods deflation reversed course, from declines to increases of around 2% to 3% by early 2026.

While the timing is striking, this relationship is complex: Durable goods prices reflect many factors beyond import tariffs. Still, the coinciding tariff spike and price acceleration suggest import taxes may be playing a role in ending the deflation consumers experienced with durable goods such as appliances, electronics, and furniture.

The current trend

Notably, effective tariffs appear to have peaked in late 2025 and have since begun declining. If this trend continues, we could see a corresponding moderation in durable goods inflation and potentially even a return to the price declines that characterized the earlier period.

How this graph was created: Search FRED for and select “Personal consumption expenditures: Durable goods (chain-type price index).” Click “Edit Graph” and change the units to “Percent Change from Year Ago.” Next, click “Add Line,” search for and select “Federal government current tax receipts: Taxes on production and imports: Customs duties,” and click “Add Data Series.” Click “Edit Graph,” use “Customize data” to search for “Current payments to the rest of the world: Imports of goods,” and click “Add.” Input the formula a/b*100 and click “Apply.”

Suggested by Maximiliano Dvorkin and Melanie LeTourneau.

The takeaway

Although data center construction and semiconductor purchases are both related to the AI boom, changes in their prices may be occurring at different stages of the investment process.

Producer price index

Our FRED graph above shows the producer price index for semiconductor and other electronic component manufacturing. This index measures prices received by domestic producers in that industry. For much of the recent past, the index had changed slowly, even during periods when semiconductor shortages received wide attention. But that pattern has changed: The index rose from 61.6 in January 2026 to 73.1 in May 2026, an increase of about 19% in four months.

A question of timing

Increased data center construction has been expected for some time. A study by Kalyani and Li (2026) finds that US business spending related to AI grew substantially in 2025: Information processing equipment, software, and data center construction accounted for one-third of total business investment in the third quarter of 2025, the highest share since 1947. In other words, the boom in AI-related capital spending appears to have materialized and is no longer merely expected. But if firms were already planning large investments in AI infrastructure, why would semiconductor prices rise only now?

One possibility is that data center construction and semiconductor demand may arrive at different points in the investment process. Early spending on data centers includes land, buildings, cooling systems, power connections, and other physical infrastructure—costs that aren’t measured by this semiconductor price index.

Semiconductor price pressures may appear later, when planned data centers are closer to being equipped and firms have a better sense of which inputs are scarce. At this stage, firms need processors, memory, networking equipment, power-management chips, and many other electronic components. Recent earnings reports from semiconductor firms suggest that AI data center demand has started to reach a wider set of chip producers and not only firms that make the most advanced AI processors.

This interpretation helps explain why semiconductor prices may not have moved much during earlier stages of the AI boom.

Also, supply bottlenecks and capacity constraints in the investment and construction process aren’t always obvious in advance. As projects move forward and orders become more concrete, firms can learn more about where supply can expand easily and where price pressures may emerge for specific components.

Inventories

A surge in expected demand doesn’t necessarily raise prices immediately if suppliers can increase production or if inventories are available. In fact, some semiconductor markets were working through excess inventories after the pandemic-era cycle. Once these inventories have fully normalized and data center orders have strengthened, the boom could begin to fully and clearly show up in the price index.

How this graph was created: Search FRED for “Producer Price Index by Industry: Semiconductor and Other Electronic Component Manufacturing.” Select the monthly, not seasonally adjusted series. The series ID is PCU33443344.

Suggested by Aakash Kalyani.

The takeaway

Expectations about personal finance conditions are at the heart of consumer confidence‚ and that confidence impacts spending, saving, and overall economic activity.

The Bankrate Consumer Survey

Our FRED graph above shows data from the Bankrate Consumer Survey, conducted annually each November or December. The survey asks US adults whether they expect their personal financial situation to be better, worse, or the same in the coming year. The graph shows two overall (or “net”) measures: the share who say better (solid blue line) and the share who say worse (dashed green line).

Between 2018 and 2025, the period when the data are available, the share of survey respondents expecting their finances to worsen grew from 12% to 32%. During those years, the share of survey respondents expecting their finances to improve shrank from 44% to 34%.

Bankrate weights the collected survey responses to reflect the broad makeup of the US adult population, and the pattern in forward-looking expectations described above complements what we discussed in a recent FRED Blog post about the perceived economic well-being of households reported through the Survey of Household Economics and Decisionmaking (SHED).

Put together, the Bankrate and SHED surveys help paint a picture of present conditions and future confidence about the state of personal finances and the overall economy. When current well-being is broadly positive but year-ahead optimism is tepid, the result may be more cautious spending and saving by households. Time will tell.

How this graph was created: Search FRED for and select “Bankrate Consumer Survey Poll: What is Your Personal Finance Outlook This Year? Better (Net).” Click on the “Edit Graph” button and select the “Add Line” tab to search for “Bankrate Consumer Survey Poll: What is Your Personal Finance Outlook This Year? Worse (Net).” Don’t forget to click on “Add data series.”

Suggested by Diego Mendez-Carbajo.