Why Most Americans Are Dissatisfied with the State of the Economy 0 8

The Consumer Price Index rose by 2.4% in January compared to last year, marking the lowest value in the last five years, according to a report from the U.S. Bureau of Labor Statistics. As noted by the Associated Press (AP) and the Wall Street Journal (WSJ), few goods have decreased in price during this time.

Inflation and rising prices, particularly for eggs, were prominent issues in the 2024 election campaign. Experts believed that this topic ultimately benefited Republican Donald Trump in the presidential election.

In January, Trump stated that "the inflation problem is solved," and that food prices "are falling everywhere." At that time, the media highlighted inaccuracies in the prices mentioned by the president. In recent months, Trump has alternately referred to himself as the "president of affordable prices" and declared the issue of affordability a "democratic fabrication."

According to WSJ, citing economist Subadra Rajappa, categories of goods that Trump previously imposed additional tariffs on continue to rise in price. Specifically, beef has increased in price by more than 15% on average over the year in the U.S., according to official statistics.

In the coming months, companies are expected to continue passing the costs of Trump's tariffs onto consumers, predicts the Federal Reserve Bank of New York. A study showed that American companies and consumers are paying nearly 90% of the costs associated with tariffs, which, according to the president, bring trillions of dollars to the country.

The largest price decrease over the year was seen in gasoline (almost 8%) and used cars.

The annual growth of the Consumer Price Index was the lowest since March 2021, which also led to a decrease in annual inflation to 2.4%. The price increase over the month (from last December to January), including food, was officially reported at 0.2%.

AP notes that key expenses in the U.S. (food, gasoline, and housing) remain on average 25% higher than before the COVID-19 pandemic.

The Federal Reserve (Fed) previously set a 2% inflation target. The Senate is expected to vote soon on Trump's nominee to head the central bank, Kevin Warsh, and congressional elections will take place in the U.S. in November.

"The pace of inflation reduction is crucial for the White House, which is trying to address growing concerns about the affordability of goods and services ahead of this year's midterm elections," points out the New York Times (NYT).

A recent CBS News poll showed that the state of the U.S. economy was rated as "very" or "somewhat good" by a total of 34% of respondents, while 60% rated it as "very" or "somewhat bad."