Today’s Consumer Price Index (CPI) report for December shows inflation at 2.7% year over year, with core inflation unchanged at 2.6%, still well above the Federal Reserve’s 2% target and likely artificially low due to the lingering effects of the government shutdown. This caps off a year in which prices for everyday goods and services remained high for working families, with little relief in sight. Nearly a year into Trump’s second term, his promise to lower prices on day one has failed, leaving households still feeling the squeeze.
Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez released the following statement:
“One year into this administration, Trump’s ‘day-one’ promise to lower prices has officially fallen flat. With inflation still elevated and families bracing for a new wave of health care, utility, and tariff-driven price hikes, it’s clear that President Trump’s agenda is making life more expensive, not less. Today’s data is a sobering reminder that while the president topples governments to protect oil interests, obsesses over a multi-million dollar ballroom, and prepares to invade Greenland, working people are left footing the bill.”
Inflation remains elevated. Headline and core CPI running at 2.7% and 2.6%, respectively, year over year, well above the Federal Reserve’s 2% target. Prices rose by 0.3% overall between November and December. Shelter and groceries drove December’s increase at 3.2% and 6.7% year over year, respectively, hitting family budgets hard over the holidays. Even video and video game subscription and rental services, which saw a 29% price increase over last year, aren’t immune to the price hikes.
Consumers are paying higher prices across essential everyday items. Over the past year, prices rose across key essentials, including groceries such as beef, bananas, and bread, housing costs like rent and electricity, and other necessities including infant and toddler clothes. These large price increases continue to hit items families rely on most.
Trump’s tariffs will keep prices elevated for American consumers in the new year. According to the Federal Reserve’s December meeting minutes, some policymakers expect tariff increases to continue pushing prices higher this year and next, suggesting that the full impact of tariffs has not yet been felt by households. Trump has already indicated that if the Supreme Court blocks his tariff authority, there are alternative ways to keep his tariffs in place, reinforcing his focus on policies that would continue pushing prices higher for working families.
Consumers remain worried about high prices and expect inflation to stay elevated. The latest University of Michigan Survey of Consumers shows long-run inflation expectations rising to 3.4%, higher than January 2025, signaling that consumers’ long term view of inflation has worsened and that they expect higher prices to persist.