Consumer News: There’s a new No. 2 in the burger wars – and a clear loser

Airfares posted one of the largest July price increases

By Mark Huffman of ConsumerAffairs

• U.S. consumer prices rose 0.1% in July and 3.4% from a year earlier.

• Core inflation increased 0.2% for the month and slowed to 2.5% annually.

• Lower gasoline prices helped contain inflation, while shelter accounted for roughly two-thirds of Julys overall increase.

U.S. consumer prices rose modestly in July, while annual inflation eased slightly as falling gasoline prices offset higher costs for shelter, restaurant meals and several services.

The Consumer Price Index increased a seasonally adjusted 0.1% in July after declining 0.4% in June, according to the July report from the Bureau of Labor Statistics. Compared with a year earlier, prices were up 3.4%, down from a 3.5% annual increase in June.

Shelter costs rose 0.1% and accounted for roughly two-thirds of the monthly increase in the overall index. Both rent and owners equivalent renta measure of what homeowners would pay to rent their propertiesadvanced 0.3%. Lodging away from home, however, fell 2.8%.

Core CPI, which excludes the often-volatile food and energy categories, rose 0.2% after being unchanged in June. Core prices increased 2.5% over the preceding 12 months, easing from 2.6% in June.

Lower energy prices

Energy prices declined 1.5% in July, their second consecutive monthly drop. Gasoline prices fell 2.9% on a seasonally adjusted basis, while natural gas prices increased 0.7% and electricity costs edged up 0.1%.

Despite the recent monthly declines, energy remained a significant source of annual inflation. The energy index was 14.7% higher than a year earlier, driven largely by a 24.6% rise in gasoline prices. Fuel-oil prices were up 39.1% over the same period.

Food prices increased 0.1% in July and 3% from a year earlier. Grocery prices slipped 0.1% during the month, helped by a 0.7% decline in the meats, poultry, fish and eggs category. Pork prices fell 1.5%, while lettuce prices plunged 16.4% largely due to the Cyclospora outbreak.

Dining out got more expensive

The cost of eating out continued to rise. Food-away-from-home prices increased 0.3% in July, with limited-service meals up 0.4% and full-service meals up 0.2%. Restaurant prices were 3.4% higher than a year earlier.

Several service categories also became more expensive. Medical-care prices rose 0.4%, including a 0.5% increase in hospital services. Airline fares climbed 2.2%, communication costs increased 0.6%, and education prices advanced 0.5%.

Prices for used cars and trucks rose 0.4%, while new-vehicle prices edged up 0.1%. Motor-vehicle insurance provided some relief, declining 0.3% after falling 2% in June.

Over the past year, shelter costs increased 3.2%, while airline fares surged 25.5%. Prices for services excluding energy services rose 3%, compared with a 0.8% increase for commodities excluding food and energy commodities.

The Common Cents Act would set a national policy for making change

By Mark Huffman of ConsumerAffairs

• The Senate passed the Common Cents Act, moving Congress closer to formally ending production of pennies for general circulation.

• The measure would permit businesses to round cash transactions to the nearest five cents when exact change is unavailable; electronic payments would not be rounded.

• Because the Senate bill differs from the version passed by the House, the two chambers must still approve identical language before sending it to the president.

Earlier this year, the U.S. Mint stopped producing new pennies, prompting retailers to get creative in how they deal with customers who pay in cash. Congress is on the verge of setting a national policy that rounds prices to the nearest nickel.

The Senate has passed the Common Cents Act, S. 1525. The bipartisan measure would formally direct the Treasury Department to stop producing one-cent coins for general circulation and establish federal rules for handling cash transactions when pennies arent available.

The penny would not disappear overnight. Coins already in circulation would remain legal tender, and the U.S. Mint could continue producing special pennies for collectors.

The bill comes as retailers, banks, and consumers adjust to dwindling penny supplies.

Production of each one-cent coin has long cost the government considerably more than its face value. When Sens. Cynthia Lummis, (R-Wyo.) and Kirsten Gillibrand, (D-N.Y.) introduced the legislation in April 2025, they said the Mint was spending roughly three cents to produce each penny.

More recent estimates have placed the cost closer to four cents.

How rounding would work

Under the Senate-passed bill, a business unable to provide exact change could round the total amount of a cash transaction as follows:

• Totals ending in one, two, six, or seven cents could be rounded down.

• Totals ending in three, four, eight, or nine cents could be rounded up.

• Totals already ending in zero or five cents would remain unchanged.

For example, a cash purchase totaling $12.42 could be reduced to $12.40. A $12.43 purchase could become $12.45.

The calculation would apply to the final amount after taxes, not to the price of each individual item.

The bill permits rounding when exact change is unavailable; it does not require every merchant to round every cash purchase. Businesses could also choose to round in the customers favor.

Credit cards, debit cards, checks, gift cards, electronic transfers, and similar payment methods would continue to be charged to the exact cent.

One unusual provision covers extremely small transactions: a cash total of one or two cents could be rounded up to five cents. Cash payments from employers to workers, however, could only be rounded upward if the employer elects not to pay the exact amount.

What it means for consumers

For most shoppers, the financial effect of symmetrical rounding should be small. Some purchases would cost one or two cents more, while others would cost one or two cents less.

But the change could be more noticeable for people who rely heavily on cash, including older adults and consumers who are unbanked or underbanked. Critics have also raised concerns that retailers could adjust prices so transactions are more likely to round upward.

The bill attempts to address those concerns by requiring the Treasury and Federal Reserve to study penny shortages, rounding practices, and the effects on low-income communities, older consumers, and people without full access to banking services. The Federal Reserve would also have to produce a plan for keeping the remaining penny supply moving through the banking system.

Consumers would still be able to spend existing pennies. The measure does not authorize businesses or banks to declare them worthless.

The bill also gives the Treasury authority to test a less expensive nickel made with an inner zinc layer and an outer nickel layer, provided the redesigned coin works in vending machines and other coin-operated equipment.

The bill isnt law yet

The House passed its version of the Common Cents Act, H.R. 3074, on July 14. Senate passage is another major step, but it does not by itself send the legislation to the White House.

The Senate bill contains an additional provision requiring the Treasury to notify and brief congressional committees before discontinuing other circulating coins. Because that language was not included in the House-passed measure, the chambers have not yet approved precisely the same bill.

The House could take up and pass S.1525 as approved by the Senate, or lawmakers could reconcile the differences through another legislative step. Only after both chambers approve identical text can the measure go to the president for a signature or veto.

With a median home price of $434,100, affordability is an issue

By Mark Huffman of ConsumerAffairs

• U.S. existing-home sales fell 1.7% in July from June, to a seasonally adjusted annual rate of 4.06 million.

• The median sale price rose 2% from a year earlier to $434,100, extending the run of annual price increases to 37 months.

• The figures point to a market constrained by mortgage rates and limited supply not a broad collapse in demand or prices.

Sales of previously owned U.S. homes declined in July, as elevated mortgage rates continued to weigh on buyers, while tight inventory helped keep prices rising.

Existing-home sales fell 1.7% from June to a seasonally adjusted annual rate of 4.06 million, according to the National Association of Realtors (NAR) July report. Sales were nevertheless 0.7% higher than a year earlier and remained up 2.4% for the year to date.

The national median price for an existing home reached $434,100, up 2% from July 2025. It was the 37th consecutive month in which prices increased on an annual basis.

NAR Chief Economist Lawrence Yun took a glass is half full approach to the numbers.

Home sales have been remarkably stable, even amid the rising mortgage rate environment of the past few months, Yun said. Year-to-date sales are up 2.4%, and theres no doubt that the housing market would be thriving if average mortgage rates were to return near 6%.

The average rate on a 30-year fixed mortgage was 6.54% in July, up from 6.49% in June but below the 6.72% recorded a year earlier.

Supply remains tight

There were 1.54 million existing homes available for sale at the end of July, down 1.9% from June and 0.6% from a year earlier. That represented 4.6 months of supply at the current sales pace unchanged both monthly and annually.

A supply level below the six months traditionally associated with a balanced market generally favors sellers. Julys figures suggest that buyers may have more negotiating room than during the pandemic-era frenzy, but inventory is still not plentiful enough to shift the national market decisively in their favor.

Homes took a median of 29 days to sell, compared with 28 days in June, and 29 days a year earlier. That relative stability also points to a slow market rather than a rapidly deteriorating one.

First-time buyers lose ground

First-time buyers accounted for 29% of July transactions, down sharply from 33% in June, although slightly above the 28% share recorded a year earlier. Cash purchases represented 26% of sales.

The fall in first-time-buyer participation suggests that households without existing housing equity remain especially exposed to high prices and financing costs. Affordability improved from a year ago, according to the NARs index, but that improvement has not yet translated into a strong revival in purchases.

Regional results were mixed. Sales rose 2% from June in the Northeast and were unchanged in the West, while declining 2% in the Midwest and 3.1% in the South. Annual price gains ranged from 0.2% in the West to 5.2% in the Northeast.

What it means for the housing market

Julys report offers little evidence of an imminent national housing crash. Distressed transactions remained just 2% of sales, prices continued to rise, and activity was slightly stronger than a year earlier.

Instead, the market appears stuck in a low-volume equilibrium. Many prospective buyers cannot comfortably afford current mortgage payments, while many existing owners are reluctant to surrender older, lower-rate loans. That reduces both demand and the number of homes coming onto the market.

A sustained decline in mortgage rates could release some pent-up demand, but it might also push prices higher unless listings and new construction rise at the same time. For buyers, that means lower rates would not automatically make homes cheaper. For sellers, modest inventory remains supportive of prices, although slower sales and longer marketing periods may require more realistic asking prices.

The smartest back-to-school purchase might be the one you never make

• Many parents are going into debt this school year, with 70% feeling pressure to keep up and 39% expecting to borrow money.

• Before making a purchase, ask yourself: "Will I still be paying for this after my child has stopped caring about it?"

• Experts say letting kids prioritize one purchase, spreading out shopping, and buying secondhand can reduce costs without making them feel left out.

A new survey of 2,000 U.S. parents from Beyond Finance found that 70% feel pressure to keep up with other families during back-to-school shopping, and many are taking on debt simply to make sure their children don't feel left out. Nearly 39% expect to take on debt this year, while 38% are still paying off debt from previous school years.

To better understand what's driving these spending habits, ConsumerAffairs interviewed Dr. Erika Rasure, Ph.D., Certified Financial Therapist and Chief Financial Wellness Advisor at Beyond Finance. Dr. Rasure says the biggest challenge facing many parents isn't inflation alone, but the emotional pressure to help their children fit in.

"The real danger is when an emotional concern like, 'I don't want my child to feel embarrassed, left out, ashamed, or bullied,' turns into a financial trap disguised as an act of love," she told ConsumerAffairs.

Parents are taking bigger financial risks

The survey found many families are turning to increasingly risky ways to pay for back-to-school expenses.

• 61% admit to buying something just so their child would fit in.

• 39% plan to take on debt.

• 23% plan to use Buy Now, Pay Later services.

• 15% expect to use personal or payday loans.

• 12% have pawned possessions.

• 8% admit they've even gambled to cover school costs.

For Dr. Rasure, these numbers show how quickly emotional decisions can become financial ones if we arent paying attention.

Making a temporary sacrifice (like cutting back on eating out) to afford the shoes your child has been asking for is very different from financing those same shoes while already carrying credit card debt.

"At that point," she said, "a temporary sacrifice can become long-term financial self-sabotage."

Eventually, those financial consequences start to affect the entire family.

One question every parent should ask

Specifically, before buying another backpack or pair of sneakers this year, Dr. Rasure recommends asking yourself one simple question: "Will I still be paying for this after my child has stopped caring about it?"

"If the answer is yes," she said, "that's a good sign to reconsider."

It's an easy question, but one that shifts the focus from today's emotions to tomorrow's finances. The takeaway being that a trendy backpack may be forgotten by Thanksgiving, but the debt could still be lingering as far away as next summer.

Parents may be buying things their kids don't even want

One of Dr. Rasure's biggest observations is that parents often spend money based on assumptions, rather than actual conversations with their kids.

"Assumption is expensive," she said. "Parents frequently assume their child needs a certain brand because everyone else is buying it. But that assumption may have more to do with the parent's own anxiety than the child's actual preferences.

"Sometimes parents are financing an insecurity their child never asked them to carry, let alone solve," she said. Instead of guessing, Dr. Rasure recommends asking your child what actually matters to them.

Her own family takes an approach that may surprise parents. Rather than buying everything before school starts, she purchases only the essentials. Then she encourages her children to spend the first few weeks observing what classmates are actually wearing, using, and talking about. Only then do they decide whether additional purchases are worthwhile.

"What appears to be 'trending' before school starts often looks very different once kids are back in the hallways," she said.

Sometimes the item children care about most isn't even expensive.

"A $6 NeeDoh or a $4 EOS lotion tucked into a backpack might matter infinitely more to your child than a $98 pair of Lululemon leggings," Dr. Rasure said. "The point is to spend based on what your child actually values not on what you assume they need."

Three ways to spend less without making your child feel left out

1. Let your child choose what matters most. Rather than buying ten new items, ask your child which single purchase matters most.
   
   Maybe it's the shoes. Maybe it's the backpack. Maybe it's a hoodie. Giving children a voice doesn't just help prioritize spending, but it also teaches them how to make thoughtful financial decisions.
   
   "They begin to understand they can make decisions about money rather than feeling like money is making decisions for them," Rasure said.
   
   Pro tip: Give your child a fixed budget of something like $25 or $50, and give them the freedom to spend the money on the one item they care about the most. By approaching it this way, not only will they feel heard, but you'll avoid spending hundreds on things that matter way less.

2. Don't do all your shopping at once. Back-to-school shopping doesn't have to happen in a single weekend. Buy what your child truly needs to start the school year, then spread out additional purchases over the following weeks or months.
   
   Preferences often change after students are back in class, and some items can become birthday or holiday gifts instead. Spacing out purchases also gives families more breathing room in their budgets.
   
   Pro tip: Wait until your child's teacher releases the official supply list before stocking up. Buying too early often leads to duplicate purchases or the wrong notebooks, folders, and classroom supplies.

3. Make smart spending something to be proud of. Dr. Rasure says parents shouldn't apologize for buying secondhand, reusing last year's backpack, or shopping resale sites. Instead of saying, "We can't afford something better," she suggests reframing the conversation.
   
   Parents can try saying something like, "We're deciding together what is worth spending our money on." Children absorb their parents' attitudes toward money.
   
   "If we treat financially responsible choices as embarrassing or shameful, they may learn to experience them that way too," she said. "But if we treat those choices as normal, thoughtful and intentional, we give our children something far more valuable than a new backpack."
   
   That lesson, she says, is confidence. "We teach them how to talk about money without shame, trust their own financial decisions, and understand that being intentional with money is something to feel confident about."

In the end, that may be a lesson just as valuable as anything they'll learn in the classroom this school year.