Wreck the Halls: As Holiday Prices Rise and AI Pricing Schemes Run Rampant, Consumers Put Trump on the Naughty List

Wreck the Halls: As Holiday Prices Rise and AI Pricing Schemes Run Rampant, Consumers Put Trump on the Naughty List

The American people have lost faith in President Trump’s handling of the economy as prices soar, small business owners struggle, and the labor market continues to soften. Holiday prices this year have soared, according to new analysis from Groundwork Collaborative, The Century Foundation, and AFT. Trump’s suggestion that kids would have to get by with fewer toys under the tree this year appears to be the sad reality for working families across the country. Americans know who the Scrooge is: nearly three in four voters hold President Trump responsible for rising costs this holiday season, leading to a sharp drop in consumer confidence in November.

To make matters worse, corporations are extorting shoppers while they look to trim the tree and prepare their holiday meals. Groundwork Collaborative, Consumer Reports, and More Perfect Union released a bombshell report this week detailing the AI-powered pricing schemes Instacart runs on shoppers to drive up prices and maximize profit. Shoppers across the country have been unknowingly enrolled in price experiments that can charge as much as 23% more for identical grocery items from one cart to another. This Instacart tax could cost households as much as $1,200 per year. Does Santa know his cookies and milk come with a side of pricing shenanigans?

Groundwork’s Chief of Policy and Advocacy, Alex Jacquez, shared his frosty reaction:

“This holiday season, American families are having to tighten their belts thanks to Trump’s senseless tariffs and economic upheaval. While we should be wrapping gifts, we’re instead grappling with higher bills at the grocery store and busted budgets in the toy aisle. Meanwhile, corporations like Instacart are running pricing experiments on shoppers buying supplies for holiday hosting and Christmas dinners. Bah humbug indeed.”

This week in the Trump Slump, new polling, investigative reports, and economic indicators continue to show that President Trump’s actions are deeply unpopular, hurting the economy, and harming America’s workers.

Polling and Economic Indicators on Trump’s Handling of the Economy:

• Holiday shoppers are in for a jingle bell shock as prices continue to rise. Prices for popular holiday gifts increased an average of 26% compared to last year, — nearly nine times the rate of inflation, according to a new analysis by Groundwork Collaborative, The Century Foundation, and AFT. For some go-to gifts, the increases are even higher: kids’ tea sets are up 55%, speakers are up 63%, and watches and earrings are up as much as 50%.
  • The strain of higher prices is falling unevenly, as lower-income families expect to trim their holiday budget by more than $100 this year, while higher-income families plan to spend about $100 more.
  • New polling from Groundwork Collaborative and Data for Progress finds that  nearly 60% of voters hold President Trump responsible for rising prices this holiday season — including 44% who say they blame the president a lot.
• AI-driven pricing tools are pushing up grocery prices for Americans. A new blockbuster investigation from Groundwork Collaborative, Consumer Reports, and More Perfect Union reveals that many U.S. shoppers who order grocery pickup and delivery through Instacart are unknowingly enrolled in AI-enabled price experiments that can charge them up to 23% more than other shoppers for the same item ordered from the same store at the same time. This could result in some households being charged as much as $1,200 extra each year at the same time consumers are facing the most severe grocery affordability crisis in a generation.
• Rising costs force small businesses to increase prices. Inflation was ranked the second most important problem in operating a small business, after labor quality, according to November’s NFIB report. Over one-third of small businesses owners reported rising prices in November, up 13 points from October, representing the largest monthly jump in the survey’s history and the highest reading since March 2023, well above the monthly average of 13%.
  • Additionally, expectations for better business conditions have fallen by 32 points since President Trump took office, as his economic mismanagement has eroded optimism among small business owners.
• The labor market is looking frightful. The hiring rate fell to 3.2% in the latest JOLTS report, approaching the lowest level since the pandemic. Layoffs rose to 1.2%, and the quit rate fell to 1.8%, the lowest level since May 2020, as workers have little confidence they will be able to find a job if they leave their current one.
  • Wages and benefits rose 3.5% over the year in September, marking its slowest increase in four years, just slightly above inflation, as workers deal with a worsening affordability crisis.
  • Applications for unemployment benefits rose last week by the most since the pandemic to 236,000 claims. While initial claims often fluctuate, Thursday’s figures are still on the higher side relative to other 2025 readings.
• The Federal Reserve cut rates, as it struggles to address both the sluggish job market and rising inflation. The Federal Reserve cut the federal funds rate by 25 basis points to 3.50% to 3.75% this week. In his press conference, Fed Chair Jerome Powell indicated that the labor market is likely worse than official data shows, and the job report may be overestimating job creation by up to 60,000 jobs a month.
• Homeownership has become a luxury that most Americans can no longer afford. Over 75% of U.S. homes on the market are unaffordable to the typical household and in most of the nation’s largest metros, buying a typical home now requires at least a six-figure income. On average, families would need roughly $33,000 more per year to afford a median-priced house.
• Trump’s handling of the economy continues to hit new lows. Just 31% of U.S. adults now approve of Trump’s handling of the economy, according to a new AP-NORC poll  — down from 40% in March and the lowest economic approval rating he’s received in any AP-NORC survey during either of his terms
  • Additionally, the same survey found that only 3 in 10 U.S. adults approve of how Trump is handling health care.
• Americans are increasingly priced out of the basic necessities. Roughly half of Americans (48%) have dipped into their savings just to cover routine expenses in the past year, according to a new survey from The Century Foundation.
  • The percentage of Americans believing health care costs are rising has increased by 10 points this year to 72%.
  • By a 21-point margin, Americans blame Trump and Republicans in Congress more than Democrats for rising prices.
  • About 30% of Americans postponed or avoided medical care because of cost. Nearly two-thirds cut back on groceries or opted for cheaper options, with over 34% saying they skipped a meal in the past year. Additionally, 82% of Americans expect the cost of living to rise over the next two years, including 70% of Trump voters.
  • A recent poll by Navigator found similar results: most Americans (51%) say they are unable to save as much money as they’d like, nearly half have stopped spending on things like eating out and going to the movies, and 47% have cut back on gift purchases due to higher prices.

Expert Commentary:

• In this week’s press conference, Fed Chair Jerome Powell expressed concern over the weakening labor market and rising inflation. “As I’ve mentioned here before, the situation is that our two goals are a bit in tension. Interestingly everyone around the table at the FOMC agrees that inflation is too high and that we want it to come down and agrees that the labor market has softened and that there’s further risk […] It’s very unusual to have a persistent tension between the two parts of the mandate”
• “Instacart is quietly running pricing experiments on millions of shoppers during the worst grocery affordability crisis in a generation, and it’s costing households as much as $1,200 a year. They have turned the simple act of buying groceries into a high-tech game of pricing roulette. When the same box of Wheat Thins can jump 23% in price because of an algorithm, that’s not innovation or convenience, it’s unfair. It’s time for Instacart to close the lab. Americans shopping for groceries aren’t guinea pigs and shouldn’t have to pay an Instacart tax.” Groundwork Collaborative Executive Director Lindsay Owens said about our blockbuster report on Instacart’s pricing schemes with Consumer Reports and More Perfect Union.
• “We know that the AI investment boom itself isn’t generating much employment, beyond what’s required for data center construction. When it comes to fiscal stimulus, a lot of employers should already have accounted for the boost from tax legislation passed five months back. That leaves consumption, which has to track employment on some level. Ultimately, it’s hard to see how rosy economic growth forecasts materialize without a stronger labor market than we currently have.” Conor Sen, Columnist at Bloomberg Opinion.
• Federal Reserve Bank of Philadelphia President Anna Paulson spoke about the k-shaped economy during speech in the Delaware Chamber of Commerce today: “This year (and 2024 for that matter) have also seen huge stock market gains driven by artificial intelligence (AI) hyperscalers (apparently, that’s the new term!) and accumulating evidence that the economy is one where low-income households are struggling, pressured by high prices and worries about job security, while higher-income 3 households continue to spend freely, supported by the strong stock market. So, while headline growth is shaping up to be pretty decent this year, the base of support looks different — with a lot of concentration at the top.”