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Trumpflation Is Here - The American Prospect
By far the loudest economic complaint against the Biden administration was about inflation. A May 2024 poll from Pew found 62 percent of adults rating it as a “very big problem,” the highest of any issue and 37 percentage points higher than unemployment. President Biden was blamed for this, and the discontent undoubtedly dragged down Kamala Harris’s campaign.
In many ways, this was unfair. Economic analyses show that most of the inflation stemmed from pandemic-era disruptions and Russia’s invasion of Ukraine; practically every country in the world saw similar price trends. And the policy that did fuel price increases somewhat, Biden’s American Rescue Plan mega-stimulus, also ended up stemming inflation by allowing the American economy to bust through supply bottlenecks with increased production thanks to high demand.
By mid-2024, inflation was nearly back to the Federal Reserve’s 2 percent target. The U.S. economy was envied around the world as having achieved the mythical “soft landing,” with inflation having been whipped without a recession or high unemployment.
So it’s a sad irony that Donald Trump’s deranged tariff policies are leading to price hikes across the economy—and this time, we almost certainly will not have the red-hot Biden labor market to compensate for the rises in price. Despite the inflation, real incomes actually increased between 2021 and 2024, particularly for low-income workers. This time around, however, a recession is building on the horizon. Prices will go up as people lose their jobs and incomes fall.
In many ways, this was unfair. Economic analyses show that most of the inflation stemmed from pandemic-era disruptions and Russia’s invasion of Ukraine; practically every country in the world saw similar price trends. And the policy that did fuel price increases somewhat, Biden’s American Rescue Plan mega-stimulus, also ended up stemming inflation by allowing the American economy to bust through supply bottlenecks with increased production thanks to high demand.
By mid-2024, inflation was nearly back to the Federal Reserve’s 2 percent target. The U.S. economy was envied around the world as having achieved the mythical “soft landing,” with inflation having been whipped without a recession or high unemployment.
So it’s a sad irony that Donald Trump’s deranged tariff policies are leading to price hikes across the economy—and this time, we almost certainly will not have the red-hot Biden labor market to compensate for the rises in price. Despite the inflation, real incomes actually increased between 2021 and 2024, particularly for low-income workers. This time around, however, a recession is building on the horizon. Prices will go up as people lose their jobs and incomes fall.
https://prospect.org/economy/2025-05-09-trumpflation-is-here/
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