When criticizing President Biden and Vice President Kamala Harris for the amount that inflation is costing families, former President Donald Trump frequently brings up a specific statistic.
On September 13, during a rally in Las Vegas, Trump accused Harris of bringing about “the worst inflation in American history, costing us and the typical family $28,000.” He again brought up the $28,000 figure during the most recent rallies in Arizona, Wisconsin, and Pennsylvania.
The rate of price rises, or year-over-year inflation, peaked under President Biden in June 2022 at 9.1%, the highest monthly record in about 40 years, but it has since significantly decreased. August saw a three-year low of 2.5% for inflation.
Reduced inflation indicates a slowing of the rate of price increases, not a decline in actual prices. The pricing tracker provided by CBS News indicates that the cost of living costs is still greater than it was prior to the outbreak.
According to economists, Trump’s $28,000 estimate is mostly accurate. But citing the number alone misses the important background that inflation caused income growth as well as price increases. According to data, many Americans have witnessed a net improvement in their financial situation during the past three and a half years.
Where did the $28,000 number originate?
Republicans on the Joint Economic Committee of Congress have produced an inflation tracker that is consistent with the estimate that inflation has cost the average American household $28,000 since Mr. Biden took office.
Based on state-level personal consumption expenditures, a gauge of spending on goods and services, government data from the Bureau of Economic Analysis serves as the foundation for the tracker.
The project began tracking monthly expenses in each state for the typical American household in January 2021.
Due to inflation, from that time until July 2024, the average cumulative rise in household costs across all 50 states and Washington, D.C. was $27,950. Updated for August 2024, the increase amounted to around $29,000.
Read Also: Florida Set to Host One of the Nation’s Largest Data Centers on Expansive Land
Pricing rises under Trump and Biden are contrasted
The Republicans on the Joint Economic Committee stated that they did not do a comparable examination of the changes in household expenses under the Trump presidency.
Prices increased under Trump as well, albeit far less, according to government data. During Trump’s four years in office, the Consumer Price Index rose by almost 8% for all items. In contrast, under Biden, the overall increase in consumer costs to date has been around 20%.
Naturally, during their tenure in the White House, the two encountered distinctly distinct economic situations. During the most of Trump’s presidency, the administration saw low inflation and robust employment creation; but, as his term came to an end, the pandemic devastated the economy.
Early in the Biden administration, as the economy recovered from job losses and interruptions to the global supply chain brought on by the COVID-19 epidemic, inflation hit modern highs. The pandemic caused significant inflation in many other nations as well, often much greater than in the United States.
According to the Federal Reserve, a well-functioning economy where individuals and businesses can make financial plans is best served by maintaining inflation at a low, stable rate of about 2% annually.
Prices usually increase during a presidential term. Economists typically believe that price increases are a sign of a robust economy, and that price reductions, or deflation, are undesirable.
Read Also: All 11 Planned Parenthood Locations in Indiana to Expand Gender-Affirming Health Services
How much money has changed under Biden?
To completely comprehend how inflation is hurting people’s finances, economists advise comparing price increases to income increases.
The median American household spent $905 more in August 2024 than it did in August 2021 to buy the same goods and services, according to Mark Zandi of independent Moody’s Analytics. This increase was attributed to inflation. But in August 2024, compared to three years earlier, the median household earned $1,073 more.
Together, the Democrats on the Joint Economic Committee reported that their calculations indicate that, between the beginning of Mr. Biden’s term and July 2024, the average family received $35,390 in additional wages and salaries.
This amount is more than $7,000 more than the Republicans on the committee estimated as the total increase in household costs during that time period.
The incomes of Americans had recovered to pre-pandemic levels by the end of last year. The U.S. Census Bureau’s most recent statistics indicates that, in 2023, the median household income increased by a healthy 4% to $80,610, which is comparable to wages in 2019 when adjusted for inflation.
