Prices Surge as Trump Fails to Deliver Relief for Working Families
Slowing wage growth, ever-increasing prices put the squeeze on Americans’ budgets ahead of midterm elections
Today’s Consumer Price Index (CPI) report shows prices rose 0.6% in September and are up 3.7% over the past year, the fastest pace since May. Gasoline prices jumped 9.1% in September alone, accounting for over half of the monthly increase in overall prices, and are up 34% from a year ago. Core CPI, excluding food and energy, rose 0.33% in September, the largest monthly increase since April.
Americans are increasingly frustrated with Trump’s failure to bring down high prices. Consumers’ views of current economic conditions are at an all-time low, and 82% of Americans disapprove of Trump’s handling of the cost of living. Instead of working to rein in inflation, Trump is trying to pull a fast one on voters, spewing empty promises to bring prices down and send Americans a $5,000 “Trump dividend” if Republicans hold Congress, despite having never delivered on the DOGE and tariff checks he promised last year.
Today’s inflation report is the last before the Federal Reserve’s October 28 interest rate decision. The Fed raised interest rates last month for the first time in three years because of inflation concerns, and most officials anticipate another increase by the end of the year. In its latest meeting minutes, the Fed pointed to Trump’s tariffs and higher energy costs, as well as the president’s never-ending war with Iran, as drivers of persistent inflation. Trump’s war and tariffs are raising the prices of nearly everything families buy, and now his actions are raising borrowing costs for families, too.
Groundwork’s Senior Vice President of Policy, Advocacy, and Research Alex Jacquez, released the following statement:
“It’s no wonder Americans have lost faith in Trump’s economy. The president has repeatedly made promises he can’t keep, and despite the band-aid attempts from the White House, there is a gaping hole in our economy just weeks from the midterms. Between the president’s war in Iran and reckless tariffs, his economy is on life support.”
BACKGROUND
Trump’s war continues to raise energy prices as families prepare for winter heating bills.
- Energy prices rose 5.2% in September alone and are up 20% over the past year. Gas currently averages $4.33 per gallon, roughly 40% higher than a year ago, while diesel is at $6.29, more than 70% higher.
- Families have already spent substantially more on fuel because of Trump’s war with Iran. The war has cost each household over $1,000, on average, in additional gasoline and diesel expenses, totaling $130 billion.
- Higher heating bills are the next expense for millions of households as the winter months near. The Energy Information Administration projects that families relying on heating oil will spend 21% more this winter than last, amounting to an additional $367 over last winter. Households heating with electricity will also pay more for heating this year as electricity prices are up 4.4% over a year ago.
Grocery prices are up, and food companies plan to keep raising prices.
- While food at home slightly declined in September, the price of many grocery staples is squeezing families putting food on the table. Apple prices are up 7.5% from a year ago, tomatoes 6.8%, and ground beef 5.4%. Lettuce prices increased 3.9% last month alone, chicken 1.3%, ham 0.9%, rice, pasta, and cornmeal 1.2%, potatoes 0.6%, fresh fruits and vegetables 0.5%.
- Food companies are warning that more price increases are coming. Last week, PepsiCo announced plans to raise prices on snacks including Doritos, Ruffles, and SunChips, citing higher fuel and agricultural costs.
Families are paying more to borrow money as the Fed raises interest rates.
- Families face higher borrowing costs as the Federal Reserve is forced to hike interest rates in the wake of persistent inflation. The Fed unanimously raised rates by 25 basis points in September, its first increase since 2023, and most officials anticipate another increase before the end of the year.
- Homeownership is growing even more expensive for families already struggling with higher prices. The average 30-year fixed mortgage rate reached 7.40% last week, its highest level since November 2023 and up from 6.30% a year ago. Higher interest rates are putting additional pressure on families looking to purchase homes or cars, or who are forced to carry credit card debt as price hikes mount.
Slowing wage growth is making it harder for families to keep up with higher prices.
- Inflation is eating away at workers’ paychecks and wage growth falls behind price increases. Average hourly earnings increased just 3.0% over the past year in September, the slowest pace since 2021, while consumer prices increased 3.7% over the same period. This marks the sixth consecutive month of real wage declines.
Trump’s tariffs continue to raise prices for everyday household goods.
- Families are paying more for household products heavily exposed to tariffs. Prices for dishes and flatware are up 7.8% over the past year, laundry equipment 6.7%, toys 6.6%, sporting goods 6.2%, and apparel 3.4%.
- Trump’s tariffs are raising prices for American-made products, too. New research from the Federal Reserve Bank of New York estimates that tariffs added 2.9 percentage points to consumer goods inflation by February 2026. Roughly one-third of the estimated price impact comes from domestically produced goods, as American manufacturers pay more for imported materials and face less competition from foreign producers.
