President Donald Trump called the renewed focus on “affordability” a “hoax” during a highly anticipated speech Tuesday in Pennsylvania, his latest blow against the word as American consumer spending has slowed amid low economic confidence.
Key data
Trump claimed that prices are dropping “considerably,” adding: “They always have a trick. Their new word is affordability.”
Trump did not elaborate on who he was referring to, although in recent weeks he has attributed the term to Democrats, who campaigned on affordability before a series of election victories in several states in November.
“I can’t say ‘affordability hoax’ because I agree the prices were too high,” Trump said, before claiming that the word “affordability” makes people believe “Trump has high prices.”
The president continued to blame Democrats for the criticism he has received over high prices, often recalling former President Joe Biden’s tenure.
Tuesday’s speech was billed as a high-profile economic speech, although the president veered into many other topics, including renewed attacks on Rep. Ilhan Omar, D-Minn., and Somali immigrants.
Are prices really going down?
Inflation in September (the most recent month for which data is available) was 3% in the Consumer Price Index, matching the start of Trump’s second term in January and well above the Federal Reserve’s target of 2% inflation. Price increases had been cooling early in Trump’s term, with inflation hitting a four-year low of 2.3% in April, before rising again after Trump announced his sweeping “Liberation Day” tariffs. Gasoline prices, however, are down: The average price of a gallon of gasoline in the United States hit its lowest point in nearly five years on Tuesday, according to data from GasBuddy. Egg and butter prices have also fallen since the start of Trump’s term. However, beef prices have risen, with some types, such as ground beef, reaching an all-time high last month. The cost of coffee has also skyrocketed due to a combination of Trump’s tariffs and bad weather, according to the Associated Press.
Key background
Trump, who is nearing the end of the first year of his second term, has blamed economic problems, Biden and Democrats. However, the president’s tariff policy has raised prices for consumers, who could continue to see them higher in January, according to multiple sources. This month, consumer confidence improved for the first time in several months, although it still remains near record pre-holiday lows. Under pressure from lower consumer demand, companies like PepsiCo and Target are reducing prices on certain products and spending; the former plans to eliminate nearly 20% of its products in the US by early next year.
This text was originally published in Forbes US.
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