(TNND) — Inflation rose last month, with tariffs possibly starting to impact prices in a more real way.

The consumer price index for June, a popular measure of inflation, was 2.7%, the Labor Department reported Tuesday.

That was up from an annual rate of inflation of 2.4% a month earlier. And it was the highest rate of inflation since February.

The month-to-month growth in inflation also accelerated.

So-called core inflation, which strips away volatile food and energy prices, rose 2.9% compared to last June.

Only new and used vehicles saw negative month-over-month prices, while all other major categories saw rising prices, noted Bankrate Financial Analyst Stephen Kates, a certified financial planner.

Moderating shelter inflation helped hold down the rising services prices even as many other categories like apparel, medical services and transportation saw accelerating prices, he said.

Inflation reports over the last several months have been tame, even as President Donald Trump announced a slew of new tariffs.

Kates said retailers tried to buffer themselves from the impact of tariffs by pulling forward imports as much as possible.

But smaller businesses are constrained by their warehouse space.

And even giant retailers like Walmart eventually need to restock.

Tariffs are clearly now impacting prices, Kates said.

“You can only get so much in before, again, prices are going to start to rise,” Kates said. “And so, as new orders are going to start to come in over the next six months through the rest of the year, those are probably going to be imported at higher prices than what you bought yesterday.”

Kates said the jump from 2.4% annual inflation in May to 2.7% in June isn’t anything to panic about in isolation, but he said the momentum toward higher prices is concerning.

And he doesn’t think inflation is finished rising for the year, predicting we could settle in at around 3.5% by the end of the year.

"I don't think it's entirely a matter of tariffs," Kates said. "I don't think we can say that that's 100% the reason for all of this increase, because we also had the conflict in the Middle East, which impacted gas prices and energy. So, there are always a number of factors. But tariffs are a major factor here."

Trump announced a slew of country-specific tariffs in early April. Those tariffs were paused a week later so the administration could negotiate more favorable trade deals with other countries.

But Trump maintained a 10% baseline tariff on most countries, with higher tariffs on China, Canada, Mexico and on some products.

Over the weekend, Trump announced he will impose a 30% tariff against the European Union and Mexico starting next month.

He also threatened Canada with even higher tariffs last week.

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The Budget Lab at Yale says Americans face an overall average effective tariff rate of 20.6%, the highest since 1910.

Kates said tariffs impact prices of different consumer categories at different times.

It happens sooner with things like food and perishables.

“Avocados can't just sit in a warehouse for six months,” he said.

It happens a little bit later with apparel, technology and smaller consumer goods.

And it happens much later with big machinery parts and cars, due to the complexity of the supply chain.

Kates said the month-over-month drop in car prices might be the effect of dealer incentives.

He noted that food prices are up 3% year over year, rising faster than the overall rate of inflation.

Despite expecting inflation to continue to rise, Kates isn’t expecting a repeat of the 8% or 9% inflation we saw a few years ago.

“The Fed is prepared for a fight here,” he said. “They have been positioning interest rates high, knowing or expecting that inflation was likely going to accelerate. So, they're in a position to try to hold this down and keep a lid on prices. Consumers also aren't going to stand for unrestrained price increases from companies. There just isn't room for that. The household budgets are tightening up, and people are going to substitute for lower-cost items. They're going to forego things that they can't afford.”