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Skyrocketing prices might not be top of mind for many consumers this spring, especially in light of significantly lower gas prices at the pump in early May. But many economists warn that consumers should get ready to pay more for some things as soon as summer.
So maybe it isn’t a bad idea to start thinking about back-to-school shopping even before summer vacation begins.
Some shoppers might want to keep an eye on Memorial Day sales to knock some gifts off a Christmas list. Sure, it sounds strange. But it’s one more weird twist in the new economic realities associated with much higher tariffs in 2025 on many goods that consumers buy.
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Spikes in shoe prices could get people talking
Can we expect to see price hikes of 15% or more on shoes or a sweater? Maybe.
If so, we could be talking about the kind of consumer indignation we saw when egg prices soared. Eggs are up 18% over the last four months or 49% in a year, according to Ernie Tedeschi, director of economics at The Budget Lab at Yale University.
Price hikes related to tariffs are not showing up yet in many goods, like clothing, because the items aren’t perishable and retailers continue to sell some “pre-tariff inventory,” Tedeschi told the Detroit Free Press.
But consumers can expect big price spikes to hit clothing and shoes this year, according to the latest forecast from the Budget Lab at Yale, a nonpartisan research center that provides analysis of federal policy proposals for the U.S. economy.
Shoe prices are expected to be 15% higher and apparel prices are expected to be 14% higher in the short run, according to the Budget Lab. And those prices could increase more in the long run.
The report issued May 12 estimated the effects of all U.S. tariffs and foreign retaliation implemented in 2025 through May 12, including the effects of the lower rates with China, the deal with the United Kingdom, and the auto tariff relief that could apply to automakers.
Right now, it’s hard to judge whether we’ll see a flood of price hikes at every store or shortages on the shelf.
“We saw during the avian flu crisis that not all grocery stores hiked egg prices,” Tedeschi said. “Some simply chose to run out of eggs. So, price rises in the end might look less painful than some feared, but that doesn’t necessarily mean that consumers haven’t been hurt in other ways.”
