Unlock the White House Watch newsletter for free
Your guide to what Trump’s second term means for Washington, business and the world
On the eve of Thanksgiving, the start of the US holiday spending period, most Americans think Donald Trump is making a national affordability crisis worse.
About three-quarters of Americans view the economy as only fair or poor, according to Pew, and a majority say that the president’s policies have heightened the problem. Those who think the economy is poor cite rising prices as their top reason.
Speaking at Tuesday’s Thanksgiving turkey pardoning ceremony at the White House, Trump, whose overall approval rating is just 41 per cent according to a Silver Bulletin polling average, said: “It’s a great time of the year, our country is doing really well economically, like we’ve never done before.”
“This Thanksgiving, we’re also making incredible strides to make America affordable again.”
But headline inflation in September was higher than it was during Joe Biden’s last full month in office, and had been further elevated in previous months, according to the Bureau of Labor Statistics.
The charts below illustrate what we do know about the magnitude of America’s affordability crisis and its stubborn persistence.
Inflation has eased significantly from its post-pandemic highs, but price increases remain above pre-pandemic levels. Personal consumption expenditure inflation, the Federal Reserve’s preferred measure, has remained stubbornly above the central bank’s medium-term target of 2 per cent.
Some household items such as eggs, coffee and steak have become tangible symbols of this trend. In some cases these goods now cost far more than they ever have.
While the Trump administration repeatedly said that the president’s sweeping tariff regime announced in April would not be inflationary, the levies have caused certain prices to increase, according to data from the BLS and company statements.
Earlier this month, the White House rolled back tariffs on dozens of food products, including beef, coffee and orange juice, with the president telling reporters that levies “may in some cases” raise prices.
Members of Trump’s own Republican party have even suggested he is out of touch with the realities facing Americans. In a blistering statement last week about her planned resignation from Congress, Georgia lawmaker Marjorie Taylor Greene lashed out at the president.
“They know how much their own bills have gone up over the past five years, they actually do their own grocery shopping and know food costs too much, their rent has increasingly gone up . . . they can’t afford health insurance or practically any insurance, and they just aren’t stupid,” she said.
Yet Trump has remained defiant, posting on social media that the cost of a Thanksgiving dinner would be down 25 per cent this year, citing prices at Walmart, and said that “AFFORDABILITY is a Republican Stronghold”.
In fact, overall “food at home” prices are up nearly 3 per cent over the past year, according to the latest BLS report. As for a typical Thanksgiving dinner, the price of poultry including turkey is up 0.6 per cent, potatoes are 3.7 per cent higher, sauces and gravies are up 0.5 per cent and fruits and vegetables have increased 1.3 per cent. Pies are up 0.4 per cent.
The price of shelter — both rents and owners’ rent equivalents — has also increased sharply and far outpaced increases in wages. Shelter costs tracked by the BLS have grown by almost 50 per cent over the past decade, the steepest 10-year increase since the mid-1990s.
The mood of the American consumer has soured in turn. The University of Michigan’s widely cited index of consumer sentiment, calculated since the 1950s, is near its lowest-ever level. While survey participants across income levels were closely aligned during peak inflation in 2022, there is now a clear bifurcation.
While the mood has improved somewhat among high earners, it has dropped to a record low for those with incomes in the bottom third.
“It feels like everything is just closing in around us, honestly,” Anissa Camacho, 26, of Pennsylvania, told the Financial Times.
Meanwhile, political campaigns explicitly devoted to affordability notched decisive victories on election day earlier this month, most notably in democratic socialist Zohran Mamdani’s victory in New York City’s mayoral race. Mamdani ran on pledges including free buses and city-run grocery stores, as well as a commitment to “freeze the rent”.
At the state level, Virginia and New Jersey voters propelled Democratic gubernatorial candidates Abigail Spanberger and Mikie Sherrill to wider than expected margins of victory after campaigns focused on the cost of living.
Trump, who repeatedly condemned Mamdani as a communist, forged an unlikely friendship with the New York City mayor-elect during a meeting at the White House on Friday. In an amicable joint press conference, the president said he would “be cheering for him”. Trump also said inflation was down to “a normal number” and would decrease.
