Inflation rises in January, Trump blames Biden and Federal Reserve

San José, CA – On Wednesday, February 12, the Department of Labor said that inflation as measured by the Consumer Price Index, or CPI, rose in January as compared to December of 2024. The monthly increase in prices was one half of one percent, as compared to 0.3% in December. This was the highest monthly increase in prices in over a year. Compared to a year ago, prices were up 3%, but if January’s increase continued for the rest of the year, the inflation rate would be 8%.

The increase in inflation was led by eggs, up more than 15% in one month. Fuel oil, used for heating in the Northeast, saw prices go up 6.2% from December. Other categories leading the way included gasoline (up 1.8%), natural gas for utilities (up 1.8%), used cars and vehicles (up 2.2%), and transportation services (up 1.8%).

The rise in the inflation rate was foreshadowed by an earlier report on consumer confidence for the first part of February, which saw expected inflation in the year ahead jump from 3.3% in January to 4.3% in February, a very large one percent leap. Expectations matter ,because consumers may try to buy more now to avoid future price increases, which causes prices to rise even more.

A big reason Trump won the election was that people were fed up with higher prices, and he promised to lower prices “on day one.” But in fact, Trump has done nothing to lower prices, instead spending time attacking diversity initiatives and health care for trans folks, and threatening to attack Panama.

Even worse from an inflation point of view, Trump has put 10% tariffs on all imports from China. In his first term Trump raised tariffs on China by a larger percentage, but it was on intermediate goods used to make final products like aluminum, wood panels, etc.

Trump’s latest tariff also include consumer products like cell phones, computers, electronics, clothing and shoes. Now a whole range of consumer goods will be going up in price as import businesses, which pay the tariff, pass on the cost to the consumer. But experience has shown that not only imports go up in price. When Trump put 25% tariffs on all steel imports in his first term, U.S. made steel went up 22% in price.

The Trump administration has also been stepping up the deportation of undocumented immigrants. This will reduce the number of workers, especially in agriculture, food processing, construction and elder care. These labor shortages will drive up the cost of labor and/or reduce the amount of food, homes, and services. Both of these will lead to higher prices.

The fact of the matter is that while Trump campaigned on “lowering prices on day one,” he actually has been busy raising tariffs, or taxes on imports, and deporting immigrants, both of which will actually raise prices.

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