Former President Donald Trump regularly criticizes President Biden and Vice President Kamala Harris over what inflation is costing families, citing one figure in particular.
At a Las Vegas rally on Sept. 13, Trump blamed Harris for causing "the worst inflation in American history, costing us and the typical family $28,000." He also highlighted the $28,000 figure at recent rallies in Wisconsin, Pennsylvania and Arizona.
Under President Biden, year-over-year inflation — or the pace of price increases — peaked at 9.1% in June 2022, the highest monthly figure in about 40 years, but it has since cooled considerably. In August, inflation hit a three-year low of 2.5%.
Lower inflation means the rate of price increases has slowed, but not that prices themselves have decreased. CBS News' price tracker shows the cost of everyday household expenses remain higher compared to pre-pandemic levels.
Economists told CBS News that Trump's $28,000 figure is largely correct. Citing the figure on its own, however, ignores the crucial context that inflation led to income growth, not just price hikes. Data indicates that over the last three and a half years, many Americans have seen a net positive increase in their finances.
Where the $28,000 figure comes from
The estimate that inflation has cost the typical American household $28,000 since Mr. Biden took office is consistent with an inflation tracker from Republicans on Congress' Joint Economic Committee.
The tracker is based on government data from the Bureau of Economic Analysis of state-level personal consumption expenditures — one measure of spending on goods and services.
The study tracked monthly costs for the average American household in each state since January 2021. From that point through July 2024, the average cumulative increase in household costs among all 50 states and Washington, D.C., was $27,950, due to inflation. In an update for August 2024, the increase rose to around $29,000.
Economists told CBS News the estimate for the total increase in household costs in the last three and a half years is likely in the correct range. Experts generally agree that household costs have increased since January 2021, although the precise number differs depending on the specific metrics used.
Comparing price increases under Trump and Biden
The Republicans on the Joint Economic Committee told CBS News they did not do a similar analysis of how household costs changed under Trump's administration.
Government data shows prices also grew under Trump, but by much less. The Consumer Price Index for all items increased by around 8% over Trump's four years in office. By comparison, the total increase in consumer prices thus far under Biden is around 20%.
Of course, the two faced markedly different economic circumstances during their time in the White House.
While Trump's administration enjoyed low inflation and healthy job growth for much of his time in office, the pandemic leveled the economy toward the end of his term. Early in the Biden administration, inflation reached modern highs as the economy recovered from employment and global supply chain disruptions resulting from the COVID-19 pandemic. Many other countries around the world also saw high inflation due to the pandemic — in some cases far higher than the U.S.
The Federal Reserve believes keeping inflation at a low, stable rate of around 2% year-over-year is best for a well functioning economy where people and businesses can plan financially. It's typical for prices to grow throughout a presidential term. A reduction in prices, or deflation, is generally not thought of as desirable by economists, and price increases are considered a feature of a healthy economy.
How incomes have fared under Biden
Economists say price increases should be compared to income increases to fully understand how inflation is affecting people's finances.
Mark Zandi of the independent Moody's Analytics told CBS News that due to inflation, the median American household spent $905 more in August 2024 to purchase the same goods and services than they did in August 2021. However, the median household made $1,073 more in August 2024 than it did three years ago.
Cumulatively, the Democrats on the Joint Economic Committee told CBS News that their calculations show the average family earned $35,390 in additional wages and salaries between the start of Mr. Biden's term and July 2024 — a figure that's more than $7,000 greater than the total increase in household costs over that time period estimated by the committee's Republicans.
As of last year, Americans' incomes had rebounded to pre-pandemic levels. According to the most recent data from the U.S. Census, in 2023, median household income rose a healthy 4%, to $80,610, on par with earnings in 2019 on an inflation-adjusted basis.
Another way to measure the financial health of Americans is to look at government data on real disposable personal income, which reflects after-tax income adjusted for inflation. This income figure includes not only wages and salaries but also income from investments and government subsidies.
Disposable personal income has been higher on average during Mr. Biden's term than it was in December 2020, Trump's last full month in office. According to Gary Burtless, an economist and senior fellow at the Brookings Institution, real disposable personal income per person has been above $49,407 — where it was in December 2020 — for 30 of the 43 months of Mr. Biden's term so far.
"Given that Americans' actual real incomes have increased over the course of the Biden administration, it's a little hard to see the basis for claiming that 'inflation under Biden has cost the typical U.S. family $28,000,'" Burtless said.
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