Trump May Have To Grapple with Returning Inflation
More than one issue boosted Donald Trump ahead of main rival Kamala Harris and back into the White House, but inflation was key among them. A federal spending spree diminished the purchasing power of the dollar and sent prices higher, inducing sticker shock among Americans that influenced their choices on Election Day. Now we’re seeing indications that inflation is back, and the new administration will have to live up to promises to bring the cost of living under control.
Prices Rise Faster Than Expected
This week, the Consumer Price Index (CPI) came in higher than expected. “The all items index rose 3.0 percent for the 12 months ending January, after rising 2.9 percent over the 12 months ending December,” according to the press release from the Bureau of Labor Statistics.
Writing for The New York Times, Jeanna Smialek noted that inflation “showed worrying staying power after volatile food and fuel costs were stripped out — a reminder that bringing price increases under control remains a fraught, bumpy process.”
A day later, the Producer Price Index (PPI), which is considered a predictor of future prices for consumers, also showed bigger increases than anticipated. “On an unadjusted basis, the index for final demand moved up 3.5 percent for the 12 months ended January 2025,” according to the Bureau of Labor Statistics.
“Another U.S. inflation reading came in stronger than expected,” commented The Wall Street Journal. “Wholesale prices rose by 0.4% in January, and the December reading was revised up.”
Adding to the sting is that last month’s inflation numbers had already delivered bad news. The numbers aren’t terrible—certainly not by comparison to the official 9.1 percent inflation rate in June 2022 during the recent surge in prices as the value of the dollar fell. But nobody wants to see their paychecks fall behind rising prices. That was a problem for the Biden administration and contributed to Kamala Harris’s loss to Donald Trump.
“In surveys prior to the election, inflation was typically the most commonly cited concern on voters’ minds,” Johns Hopkins University economist David A. Steinberg commented after the election. “Most voters also thought Trump would do a better job than Harris at bringing prices down.”
“Bringing prices down” is a tall order once
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