President Donald Trump’s White House says the United States is “making big progress on prices”, pointing to a lower US inflation rate in 2025 and falling petrol and grocery costs.
But for many shoppers and retailers, the story on the shop floor looks very different: prices are rising more slowly, not going back to where they were, and household budgets remain under strain.
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Headline inflation is now running at about 3% year on year, up slightly in September after earlier declines, according to official consumer price index (CPI) data.
That is far below the peak of 9.1% reached in June 2022 during the post-pandemic surge in US inflation, but it still sits above the Federal Reserve’s 2% target.
Across the full basket of goods and services, US consumer prices have risen by roughly a quarter since 2020, based on CPI index levels.
For households, that means the cost of living reset at a much higher level – and a slower US inflation rate in 2025 does not undo those earlier increases.
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By GlobalDataFalling US inflation has not reversed years of price rises
The White House argues that Mr Trump “tamed Biden’s inflation crisis”, claiming inflation has averaged around 2.7% in his second term, compared with almost 5% under his predecessor.
Independent figures confirm that inflation under President Joe Biden did spike, with annual rates of 4.7% in 2021, 8.0% in 2022 and 4.1% in 2023, before cooling to just under 3% in 2024.
However, that cooling came after the worst price surge in four decades. From 2020 to 2025, the overall CPI index has climbed from about 259 to over 322, implying prices around 24–25% higher on average than before the pandemic era.
Even if the US inflation rate in 2025 settles near 2.7–3%, shoppers are paying significantly more than five years ago for the same basket of goods.
The administration also highlights a rare monthly fall in prices as evidence of “the first overall price decline since 2020”. It is true that consumer prices dipped briefly in June 2024, the first monthly drop in four years, but the year-on-year inflation rate at that point remained positive.
Economists note that a single month of flat or falling CPI does little to change the cumulative cost pressures facing families. At the same time, major institutions warn the US may be settling into a regime of inflation persistently above 2%.
Analysis of inflation from 2012 to 2025 suggests the average rate has shifted up to around 2.7%, compared with 1.5% in the previous decade, reinforcing concerns that the price environment has structurally changed.
Food inflation and grocery prices keep pressure on household budgets
The White House statement lists a range of staples – from eggs and butter to rice and pasta – that it says are now cheaper.
National data tell a more complicated story. The US Department of Agriculture (USDA) reports that “food at home” prices at supermarkets and grocery stores were 2.7–3.2% higher in August 2025 than a year earlier.
One analysis finds the CPI index for food at home has risen about 30% since January 2020.
Within that overall rise, some items have recently fallen in price, such as eggs after sharp bird flu-related spikes, but many remain far more expensive than before the inflation surge.
USDA and Congressional research note that egg prices, for example, have swung wildly, at times posting monthly increases of more than 10% and year-on-year rises in double digits.
Consumer surveys suggest shoppers are acutely aware of those changes. Research from Morning Consult this autumn found more than seven in ten US adults are worried about the price of groceries, with half saying they now compare prices more often.
A LendingTree-commissioned survey earlier this year reported that 88% of Americans are rethinking how they shop for food because of inflation, with many cutting back on non-essentials and switching to own-label goods.
Retail data describe similar behaviour. Circana figures cited by industry analysts show shoppers visiting stores more frequently but buying more selectively, favouring promotions and trading down to cheaper proteins and frozen options as food inflation lingers.
For supermarkets and brands, that means thinner margins, higher promotional spend and less room to pass on cost increases – even as their own energy, transport and labour bills remain elevated.
Mortgage rates, housing costs and real wages show uneven progress
On housing, the White House points to a “moderating” market and notes that the average 30-year fixed mortgage rate has fallen to about 6.17% at the end of October.
That is lower than peaks above 7% seen over the past two years, but still roughly double the sub-3% rates available in 2021.
For would-be buyers, the combination of higher borrowing costs and sharply higher home prices keeps affordability stretched. Market analysts estimate that a typical US home now requires a monthly payment of around $2,600 on a standard mortgage, even after the latest rate declines.
Rents have also moved higher. Official CPI data show shelter costs still rising by about 3.6% over the past year, even if the pace is now the slowest in four years.
The administration stresses that Americans have enjoyed “real wage gains” since Mr Trump took office. Bureau of Labor Statistics figures confirm that real average hourly earnings rose by about 1.1% between August 2024 and August 2025, with a similar 1.4–1.5% annual gain recorded in May.
Yet those modest improvements come after earlier years in which inflation outpaced pay rises. Median household income in 2024 was only just back to its 2019 level in real terms, highlighting how long it has taken many families to recover ground lost during the pandemic and subsequent inflation spike.
Anecdotally, retailers report that customers are still acting as if a cost-of-living squeeze is under way. Industry surveys warn of cautious spending going into the 2025 holiday season, with forecasts for retail sales growth weaker than in previous years and seasonal hiring expected to be among the softest on record.
Sentiment data underline that disconnect between macro-level progress and household experience. The University of Michigan’s Consumer Sentiment Index fell to 50.3 in November, close to its all-time low from the 2022 inflation shock and far below pre-pandemic norms.
High prices, tariff uncertainty and a recent government shutdown have all weighed on confidence, leaving shoppers more inclined to save or trade down than to spend freely – even as the White House trumpets “big progress on prices”.
For retailers, that gap between White House messaging and the everyday reality of the US cost of living is what matters. Inflation has eased, and the US inflation rate in 2025 is far from the extremes of recent years.
But until wages, housing and grocery bills feel manageable again for the typical family, claims of victory over high prices are unlikely to resonate at the till.
A MAGA firebrand says voters aren’t buying it
Georgia Republican congresswoman Marjorie Taylor Greene, a leading figure in the pro-Trump “Make America Great Again” (MAGA) movement and until recently one of the President’s staunchest allies, has criticised his handling of the economy in a media interview with former White House press secretary turned talk-show host Sean Spicer.
“President Trump and his administration does deserve a lot of credit for lowering inflation and holding it steady,” Greene told host Sean Spicer on a recent episode of his eponymous show. “But that doesn’t bring prices down.”
“So gaslighting the people and trying to tell them prices have come down is not helping,” she continued.
“It’s actually infuriating people, because people know what they’re paying at the grocery store, they know what they’re paying for their kids’ clothes and school supplies, they know what they’re paying for their electricity bills.”
