Look out, Donald: Inflation and economic fears are coming for you

This time last year, America was focused on the upcoming presidential election. Despite a major hiccup during the summer, in which President Joe Biden bowed out after weeks of fevered speculation following a catastrophic debate performance and left Vice President Kamala Harris to carry the banner into November, Democrats were feeling very positive about their prospects. After all, the former guy, as Biden often referred to him, had lost the previous election, tried to stage a coup and had been convicted of 34 felonies. He couldn’t possibly make a comeback.

But no matter how they tried to explain it to voters or to shift the focus to other issues, Democrats were faced with a problem. In the end, they couldn’t escape it. 

In mid-2021, for the first time in 40 years, inflation took hold of the American economy. The Covid-19 pandemic had caused upheaval around the world. Delayed consumer demand accelerated dramatically at a time when supply chains were chaotic and necessary government stimulus increased the money supply. The Russian invasion of Ukraine put even more stress on the situation by driving up food prices and energy costs. By June 2022, inflation reached 9%.

In October 2024, just a month before the presidential election, inflation had decreased dramatically to 2.4%, just slightly above the Federal Reserve’s target of 2%. But people weren’t feeling the recovery — and in politics, perception is everything.

Prices hadn’t reverted to what they were before the pandemic. And when the price of eggs spiked due to an outbreak of avian flu, it became the symbol of general anger and unhappiness at the overall economy. The vibes, as they became known, were bad. 

Many Democratic party officials, pundits and analysts believe inflation is what got Donald Trump reelected. There were enough people who were spooked by perceptions about the economy, and many remembered the first Trump administration as a kind of golden economic age — mostly because he kept telling them they were. They believed he would bring prices down. At campaign events and in interviews, Trump would be asked what he planned to do about the cost of living, and he would meander around, saying that tariffs would bring in huge amounts of money, implying the government would cover additional costs. 

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During one appearance, he was asked about the soaring cost of child care. He clearly had no idea how to respond, so he first referenced his daughter Ivanka’s work on the issue during his first term. Then Trump declared that, “relatively speaking, [childcare is] not very expensive compared to the kind of numbers we’ll be taking in.” At an event at his golf club in Bedminster, New Jersey, he posed with tables full of groceries and vowed, “When I win, I will immediately bring prices down, starting on Day One.”

That never happened, and now many of the people who were counting on their grocery bills going back to what they were seven or eight years ago are gravely disappointed. Still, that hasn’t stopped Trump from telling them that their vibes are wrong and that inflation is gone. During a Thursday roundtable at the White House, he dismissed such anxieties. “Inflation, I’ve already taken care of,” he said. “Economically, the country is the strongest it’s ever been — thank God for tariffs. If we didn’t have tariffs we’d be a third-world nation.”

That’s a typically absurd comment and barely anyone believes it — not even many of his own supporters. Polling shows that inflation is the president’s lowest issue rating, averaging in the mid-30s and dropping. While the price of eggs has fallen back to normal levels now that the bird flu crisis has abated, people are seeing the price of beef skyrocket by 51% since February 2020. Americans famously love beef, so this placed Trump in dangerous territory — even before he announced his plan to quadruple imports of Argentinian beef, which have left ranchers “furious,” according to the New York Times.

The president’s tariffs haven’t helped. Inflation has been edging up ever since he announced his trade war in April, despite the warnings of most economists, who cautioned that tariffs will raise prices for consumers. The full effects of Trump’s tariffs haven’t yet been felt. Bigger companies were able to front load their inventories in anticipation, and small businesses have been taking out loans and freezing hiring to keep from raising prices. While farmers are being squeezed by losing their international markets due to retaliatory tariffs, they are facing higher prices for their own inputs at the same time. 

Aside from the AI boom that’s fueling the stock market bubble, the economy is basically frozen, according to economist Paul Krugman. Everyone is holding their breath, waiting to see if the mercurial Trump will continue these tariffs, or if he will pull back once he’s flattered just the right way or given something he wants in return. (On Saturday, Trump announced an additional 10% tariff on Canadian goods after a television ad funded by Ontario used the voice of President Ronald Reagan to denounce tariffs and aired during the World Series. He had already suspended trade talks with Canada on Thursday because of the ad.) But with the tariffs in effect, businesses are paying more for the imports they need to produce their goods and supply their customers. 

The government shutdown has delayed the release of all economic data except the Consumer Price Index (CPI) for September, which the administration called back federal workers to produce because it’s required to determine Social Security payments. On Friday, the Bureau of Labor Statistics reported that the CPI showed a 3% rise when compared to September 2024 — the fastest annual pace since the start of the year. When combined with what is assumed to still be a deteriorating job market — those numbers are still unavailable due to the shutdown — it shows that Trump’s claim that the economy is the strongest it’s ever been to be laughable. 

Inflation is now a ticking time bomb for Republicans. They should have learned from the Biden administration’s stumbles that you can’t persuade people that they should be happy about the cost of living just because the statistics are good. And in this case, the statistics are not good. In fact, they’re getting worse.

Not even Trump, with his talent for pounding falsehoods so relentlessly that it convinces a lot of people to believe him instead of their own eyes, can beat the vibes when people are paying more and earning less. It’s another perfect storm, and this time it’s one entirely of his own making.