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Will Trump really lower your grocery bill? Most Americans doubt it

January 17, 2025
President-elect Donald Trump said he won the presidency on the promise he would lower the cost of groceries. But days before he takes the oath of office, most Americans remain skeptical he can deliver on that promise.

More than three in five Americans are slightly or not at all confident Trump will lower the cost of food, housing or health care in 2025, according to the latest AP-NORC poll.

Republicans expressed greater confidence in Trump than Democrats or independents. Still, less than half of them have high confidence in his ability to lower costs in those categories. Only one-third of Republicans have high confidence he will lower health care costs, while 44% believe grocery prices will go down.

Trump’s promise to lower grocery costs

“I won on groceries, it’s a very simple word, groceries,” Trump told NBC’s Kristen Welker in an interview published Dec. 8. “I won an election based on that. We’re going to bring those prices way down.”

But in his Time Person of the Year interview published just four days later, he noted how difficult fulfilling that promise would be.

“I’d like to bring them down. It’s hard to bring things down once they’re up. You know, it’s very hard,” he said. “But I think that they will. I think that energy is going to bring them down. I think a better supply chain is going to bring them down.”

This week, Trump’s pick for treasury secretary, Scott Bessent, fielded questions from Democrats and Republicans about consumer prices during his Senate confirmation hearing.

When asked if prices for families would go up or down under Trump’s policies, Bessent replied, “I believe that inflation will be much closer to the Federal Reserve’s target of 2%.”

Lowering inflation vs lowering prices

Lowering inflation and lowering prices are two different targets. Lowering inflation would slow the increase in prices, while lowering prices would result in deflation, when the inflation rate falls below 0%.

In 2024, consumer prices rose 2.9% on the year, according to December data released this week by the Bureau of Labor Statistics. The rate of inflation rose three months in a row to end the year after bottoming out at 2.4% in September.

December’s surge was fueled by higher food and energy costs. The energy index rose 2.6% on the month. Food prices went up 0.3% on the month and 2.5% on the year. Food prices are up about 28% over the past five years.
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Inflation rises 2.9% in 2024 as consumer prices heat up heading into 2025

January 15, 2025
Inflation continued to head in the wrong direction in December. Consumer prices rose 2.9% on the year, hotter than the 2.7% rise in November.

On the month, prices rose 0.4%, the highest monthly rise since February. In November, prices rose 0.3%.

It’s the third month in a row the key inflation gauge rose. It’s now at its highest point since July, according to Bureau of Labor Statistics data.

Experts believe the December rise in prices is fueled by higher food and energy costs. The energy index rose 2.6% on the month but is still down 0.5% on the year, while food is up 0.3% on the month and 2.5% on the year. Food prices are up about 25% over the past five years.

Core inflation, which strips out the more volatile food and energy indexes, came in slightly cooler than expected at 3.2% on the year, after several months at 3.3%. On the month, core prices rose 0.2%. Core inflation has not fallen below 3.2% since April 2021.

After peaking at 9% in June 2022, overall consumer prices started their long descent toward the Federal Reserve’s 2% inflation target. The Fed raised its benchmark interest rate to the highest level seen in decades to restrict the money supply and depress inflation.

In September, consumer price inflation reached 2.4%, but since then has climbed in the opposite direction.

“While we do not believe progress in the fight against inflation is going into reverse, we do see it stalling this year as earlier tailwinds to disinflation from supply chain improvements and lower commodity prices have faded and as fresh headwinds from trade policy are likely to emerge,” Wells Fargo economists Sarah House and Aubrey Woessner wrote in a note previewing the December report.

New trade and immigration policies from the incoming Trump administration are also Federal Open Market Committee member minds. The committee sets the Fed’s rate.

In December, members projected overall inflation will increase slightly in 2025, while core inflation will decrease.

“Almost all participants judged that upside risks to the inflation outlook had increased,” minutes from the meeting read. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”

In that December meeting, members still forecast two interest rate cuts in 2025. However, probability markets are penciling in just one cut in July as of Wednesday morning.

The latest consumer inflation report follows last week’s jobs report. It showed the U.S. economy added 256,000 jobs in December, roughly 100,000 more than expected.
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US economy wows with 256,000 jobs added in December, more than expected

January 10, 2025
The U.S. economy added 256,000 jobs in December, roughly 100,000 jobs more than expected. The unemployment rate ticked down to 4.1% from November’s 4.2%.

December’s jobs figure was even higher than November’s 212,000, which experts said was skewed higher by people returning to work from strikes and hurricanes.

December’s Labor Department’s report appeared to be buoyed by a 72,000-job swing in retail trade.

In December, retail trade added 43,000 jobs, while it lost 29,000 jobs in November. Health care, government and social assistance, along with leisure and hospitality, all saw double-digit gains as well.

While the country saw a rise in unemployment earlier in 2024, the Bureau of Labor Statistics said the unemployment rate has held steady at 4.1% or 4.2% for the past seven months.

“I continue to believe that the U.S. economy is on a solid footing,” Federal Reserve Governor Christopher Waller said earlier this week. “I have seen nothing in the data or forecasts that suggests the labor market will dramatically weaken over coming months.”

Labor market weakness is what triggered the Federal Reserve to start cutting its benchmark interest rate in September, even as progress on inflation stalled. After a jumbo-sized 50-basis-point cut, the Fed made two more 25-basis-point cuts to close out the year, dropping the federal funds target range to 4.25% to 4.5%, a full percentage point below its 2024 peak.

However, as the labor market showed renewed resilience, inflation started to rise. Consumer prices rose 2.7% for the year ending in November, after rising 2.6% in October and 2.4% in September.

“This minimal further progress has led to calls to slow or stop reducing the policy rate,” Waller said Wednesday, Jan. 8. “However, I believe that inflation will continue to make progress toward our 2% goal over the medium term and that further reductions will be appropriate.”

In December, the Fed released its latest economic projections, which forecast just two cuts in 2025, down from the previous forecast of four. In response, interest rate expectations rose.

This week, the average rate of a 30-year mortgage hit 6.93%, the highest level since July, and nearly a full percentage point higher than when the Fed started cutting its rate in September.

Why are mortgage rates going up while the Fed is cutting rates? Watch this video.

On Thursday, Jan. 9, the probability market had the Fed holding rates steady until June. It was split on whether the Fed would do a second cut in December or hold steady at one cut for the year.

Minutes released this week from the Fed’s last meeting revealed added concern about inflation. Without naming President-elect Donald Trump or his tariff and immigration policies, the Federal Open Market Committee multiple times brought up the unknown impact those policies might have on the economy.

“Almost all participants judged that upside risks to the inflation outlook had increased,” the minutes read. “As reasons for this judgment, participants cited recent stronger-than-expected readings on inflation and the likely effects of potential changes in trade and immigration policy.”
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Fed forges ahead with third interest rate cut despite growing inflation

December 18, 2024
The Federal Reserve continued its rate-cutting campaign Wednesday, Dec. 18, marking the third cut of 2024. The central bank shaved off another 25 basis points from its benchmark rate, in line with expectations.

The latest decision sets the benchmark interest rate between 4.25% and 4.5%, down from 4.5% and 4.75%. The rate sat above 5% for more than a year between 2023 and 2024 while the Fed attempted to get a hold of rampant inflation brought on by the COVID-19 pandemic aftermath.

The central bank has a dual mandate of maintaining price stability and full employment.

But price stability is starting to go back in the wrong direction. Consumer price inflation rose 2.7% annually in November, after dropping to a 2.4% annual rate in September. Monthly prices rose 0.3% from October, according to the Bureau of Labor Statistics.

Meanwhile, The U.S. jobs market beat expectations in November, adding 227,000 jobs after a bleak October report driven by hurricanes and strikes. However, the unemployment rate ticked up to 4.2%.

The Fed’s decision comes just over a month before President Joe Biden leaves office. President-elect Donald Trump has been critical of Fed Chair Jerome Powell in the past but has publicly stated he will not try to fire him before his term ends in 2026.
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Why November’s 227,000 jobs added is not as impressive as it seems

December 6, 2024
The U.S. jobs market beat expectations in November, adding 227,000 jobs after a bleak October report driven by hurricanes and strikes. At the same time, the unemployment rate ticked up to 4.2% from 4.1% in October, according to Labor Department data.

Payroll employment has averaged 186,000 jobs added per month over the last 12 months. While November’s numbers beat the 12-month average, Burning Glass Institute’s Director of Economic Research Guy Berger warns it may not be as impressive as it looks.

“I think this is a pretty ho-hum labor market,” Berger said. “We saw a big gain in jobs. It was expected because we had a bunch of striking workers at Boeing coming back to work, about 40,000 of them, and on top of that, we had a big hurricane last month.”

“You abstract from that noise of all those people coming back to work, and the monthly job gains are probably not very impressive right now,” he added. “The direction is definitely lukewarm.”

Employment in health care and hospitality drove much of the job gains, up 54,000 and 53,000 jobs for the month, respectively. Meanwhile, the retail trade lost 28,000 jobs in November.

The transportation equipment manufacturing sector added 32,000 jobs in November, reflecting workers returning from strike, the Bureau of Labor Statistics said.

BLS also revised up jobs data for the past two months. September was revised up by 32,000, from 223,000 jobs added to 255,000 jobs added. October was revised up by 24,000, from 12,000 jobs added to 36,000 jobs added.

BLS said the monthly revisions are a result of additional reports received from business and government agencies since the last published estimates, along with recalculating seasonal factors.

The Federal Reserve will use this latest jobs report to guide the committee’s next interest rate decision in mid-December. Right now, markets are heavily favoring a 25-basis-point cut.

“The unemployment rate is still moving upward a little bit, though less than they expected, and inflation has gone up more than they expected,” Berger said. “So I think on balance, it sort of says, well, we probably shouldn’t reduce interest rates as much.”

Berger said the Fed is in an uncomfortable spot right now because the data from its two mandates, price stability and maximum employment, are both a little less clear as to what direction they’re heading.
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September surprise: US adds 254,000 jobs, unemployment dips to 4.1%

October 4, 2024
The U.S. economy added far more jobs than anticipated in September while the unemployment rate ticked down to 4.1%. According to the latest data from the Bureau of Labor Statistics (BLS), the U.S. added 254,000 jobs in September when economists expected around 150,000. In August, preliminary data showed 142,000 jobs added and 4.2% unemployment.

With the release on Friday, Oct. 4, the BLS revised July’s numbers up by 55,000 to 144,000 jobs added for the month. It also revised up August’s numbers by 17,000 jobs, from 142,000 to 159,000 jobs added.

In total, jobs added in July and August are 72,000 more than previously reported by the Labor Department.

The latest jobs report comes less than a month after the Federal Reserve lowered its benchmark interest rate by 50 basis points. The U.S. central bank has a dual mandate to maintain stable prices and reach full employment.

This stronger-than-anticipated report will put the Fed’s November meeting in focus, where it is anticipated it will cut rates again by 25 bps.

The Bureau of Labor Statistics said the number of people not working who want a job is at 5.7 million. Construction employment continues to trend up, adding 25,000 jobs in September. The construction sector has consistently grown over the last 12 months, adding an average of 19,000 jobs per month.

Jobs in food services and drinking establishments rose by 69,000 in September, considerably above the 12-month average of 14,000 per month. This sector contained the largest increase in jobs for the month.

Health care added 45,000 new jobs, which is below the average monthly gain of 57,000 over the last 12 months.

The latest jobs report comes amid two large labor disputes.

Machinists at Boeing have been on strike for three weeks. Meanwhile, a dockworkers strike at ports along the East Coast hit the picket line earlier this week, but were able to reach a tentative agreement to suspend the strike until Jan. 15, 2025.
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Fed expected to slash rates by 25 bps in September. What’s next?

September 11, 2024
After the Wednesday, Sept. 11, inflation report came in on target, markets are even more confident the Federal Reserve will cut its rate by 25 basis points following its policy meeting next week. In August, Fed Chair Jerome Powell said it was time for policy to adjust after an “unmistakable” weakening in the labor market. But how much adjusting is coming down the pike after September?

The federal fund target range is a benchmark rate for lending. Since July 2023, the Federal Open Market Committee has held the range between 5.25% and 5.5%, its highest level in more than two decades.

Markets initially expected rate cuts to come much earlier in the year, but after inflation remained stickier than anticipated, September would mark the first rate cut since early 2020 after five straight months of cooling consumer price inflation.

If the Fed decides to cut in September, it will mark the beginning of a rate-cut cycle. After the Fed’s decision on Sept. 18, the committee will meet two more times in 2024, the two days after the November election and Dec. 17-18. For more on how much the Fed may cut this year and next, Straight Arrow News spoke with the Fed Guy Joseph Wang.

The following transcript is edited for length and clarity. Watch the full clip in the video above and catch the entire interview on Straight Arrow News’ YouTube page.

Joseph Wang: So the market is pricing in a very, very aggressive Fed cut cycle, so aggressive that the market is pricing by the end of next year, the overnight rate will be below 3%. So that’s from 5.5% today to below 3% next year.

Now that’s a very aggressive rate path, expected policy pricing by the market, and that seems to assume a significant deterioration in the economy.

Let’s look at the big picture, though. The most recent GDP statistics in the US were revised upwards from 2.8% annual growth rate to 3%, so the economy is actually growing fine. There’s really no indication that we would just suddenly go from 3% to a recession where we don’t grow, we shrink.

Jobs reports, again, slowing, but we’re still creating over 100,000 jobs a month. When we’re in a recession, we don’t create 100,000 jobs a month, we lose 100,000 jobs a month. And so the pricing in the market seems to be pretty aggressive from my perspective, I think there’s too much doom and gloom being priced in.

My base case expectation is that rather than having a series of huge cuts that the market is assuming that we have, [we have] some steady 25-basis-point cuts, and maybe the cut cycle ends, let’s say around 3.5%, rather than below 3%. I say this because, by all indications, the economy continues to have momentum and there’s a good case to be made that rather than falling into recession, we really are just normalizing now.

One other thing that I would mention is that something that’s happening today that hasn’t happened before is that we have tremendous amounts of fiscal spending. The government is expected to have a fiscal deficit of about a couple trillion dollars, basically forever, and when you have the government spending so much each year, that’s very supportive of demand. It’s upward pressure on inflation. It’s not a very good management of the currency, but it is supportive of demand.

And so when you have that kind of fiscal spending, I think that’s a good tailwind. Now, one other thing to keep in mind is that what happens in November could have very big implications for macro policy. We have two candidates with very, very different visions of the world. We also have to look at Congress to see whether or not they are able to carry out their different visions of the world.

So there’s a lot of uncertainty there. But based on what I see right now, the economy is still okay, and the rate cuts in the markets are too aggressive. We’ll have some, but it doesn’t seem like we would have so many, because it doesn’t seem like at the moment that we are tumbling into recession.
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Day 1 of Democratic National Convention, Biden slated to speak tonight

August 19, 2024
The Democratic National Convention kicks off in Chicago as President Joe Biden is among the names scheduled to speak the first night. And Secretary of State Antony Blinken is in Israel preparing for what he calls a ‘decisive moment’ in cease-fire talks. These stories and more highlight The Morning Rundown for Monday, Aug. 19, 2024.

Day 1 of Democratic National Convention, Biden slated to speak

The stage in Chicago for the start of the Democratic National Convention (DNC) that kicks off Monday. The four-day event will conclude with Vice President Kamala Harris and Minnesota Gov. Tim Walz formally accepting the Democratic nominations for president and vice president.

Part of the agenda for day one includes special tributes planned to honor the opening night’s headline speaker, President Joe Biden. Former Secretary of State Hillary Clinton is also slated to speak at the DNC Monday night.

Other speakers you’ll see over the next few days include former presidents Barack Obama and Bill Clinton, former House Speaker Nancy Pelosi and former first lady Michelle Obama.

https://twitter.com/DemConvention/status/1825327712661086501

Mayor Brandon Johnson said Chicago is “prepared and ready” and security has been beefed up inside and outside the convention as thousands of Gaza war protesters are planning to descend on the city.

The Democratic Party has released some of its key policy points it expects to address over the next four days. Those include raising the federal minimum wage to $15 per hour, making the child tax credit permanent and IVF and abortion protections.

Ahead of the DNC, Harris and Walz spent time in the battleground state of Pennsylvania. Former President Donald Trump will be back in Pennsylvania Monday after also spending time over the weekend in the Keystone State.

A new ABC News poll has Harris leading Trump overall 50 to 45%. However, Trump is leading Harris on key issues for voters: the economy and immigration.

Former Congressman George Santos to plead guilty to federal charges

Former Congressman George Santos, R-N.Y., is expected to plead guilty to federal charges Monday, Aug. 19 afternoon. It’s a reversal of his previous plea of not guilty.

https://twitter.com/CBSEveningNews/status/1825346068990644242

Santos, who was expelled from the House of Representatives, faces 23 felony charges, including defrauding donors, lying about his finances and needlessly accepting unemployment benefits, among other things.

A guilty plea would avoid a trial, which is scheduled to begin next month. Sources close to the matter told The New York Times Santos is expected to give a statement acknowledging the crimes he has agreed to plead to.

Blinken: ‘This is a decisive moment’ in cease-fire talks

Secretary of State Antony Blinken is in Israel Monday, meeting with top Israeli officials before traveling to Egypt for ongoing negotiations to reach a cease-fire and hostage release agreement. This is his ninth trip to the region since the Israel-Hamas War began.

“This is a decisive moment,” Blinken said at a press conference in Tel Aviv. “Probably the best, maybe the last opportunity to get the hostages home, to get a cease-fire and to put everyone on a better path to enduring peace and security.”

Israeli Prime Minister Benjamin Netanyahu’s office has expressed “cautious optimism” that a deal can be reached, while Hamas is accusing Israel of stalling efforts to reach a deal in order to continue striking inside Gaza.

https://twitter.com/AJEnglish/status/1825362898979332482

Meanwhile, Israel is still bracing for a potential attack by Iran, adding more pressure for compromise at the negotiation table.

Biden administration’s immigration policy launches

A new Biden administration policy will allow some spouses of U.S. citizens who do not have legal permission to stay in the U.S. to legalize their status without having to leave the country. That initiative starts Monday, Aug. 19.

The U.S. Citizenship and Immigration Services will begin accepting applications for individuals requesting “parole in that place” that would allow migrant spouses without legal status to apply for a green card and eventually get on a path to citizenship.

To be eligible, the spouses must have been continuously in the U.S. for at least 10 years, not pose a security threat or have a disqualifying criminal history, and have been married to a U.S. citizen before June 17 — the day before the program was announced. They must also pay a $580 fee to apply and fill out an application explaining why they deserve humanitarian parole and providing a list of supporting documents proving how long they have been in the country.

The Biden administration says about 500,000 people could be eligible for “parole in place” plus about 50,000 of their children.

Egg prices on the rise again as bird flu impacts supply

Egg prices are on the rise — again. According to the Consumer Price Index, egg prices were up by nearly 20% in July, and economists say inflation is not the issue this time.

Rather, it’s believed to be the ongoing bird flu outbreak limiting the supply of eggs.

https://twitter.com/WIONews/status/1825434627038736682

The Bureau of Labor Statistics said the average rate for a dozen large, grade A eggs topped $3 in July for the first time in more than a year. July also marked the third month egg prices rose on an annual basis, a reversal after a year of relative decreases.

Perdue recalls over 167K pounds of chicken after wire found in packaging

Perdue Farms is recalling over 167,000 pounds of its frozen chicken products. The voluntary recall comes after a foreign material — identified as a thin strand of metal wire — was found in some packages.

The products are the Perdue Simply Smart Organic gluten-free breaded chicken breast nuggets, the breaded chicken breast tenders, and the Butcher Box organic free fully frozen-cooked breast chicken nuggets. All have a “best-if-used-by date” of March 23, 2025.

Perdue says no illnesses have been reported and the recall was issued out of an abundance of caution.
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More landlords offer incentives to get more renters

August 16, 2024
Rent prices have skyrocketed in the past few years, but renters might be finding a bit of an edge now. More rentals are sitting empty — leading landlords to look for ways to sweeten the pot.

Zillow said the share of listings offering incentives, like free parking or a few weeks rent-free, is up to 33.2%. That is a big difference compared to August 2023, when only 25.4% of landlords were offering incentives.

Zillow also said it found six metro areas where these deals are especially popular. More than half the rental listings on Zillow are offering incentives in Raleigh, North Carolina; Charlotte, North Carolina; Atlanta, Georgia; Salt Lake City, Utah; Nashville, Tennessee; and Austin, Texas.

According to the Bureau of Labor Statistics, housing accounted for almost 90% of the monthly increase in consumer prices across the economy in July, up 5.1% from last year. Zillow also said apartment rents are still getting more expensive, also up 5.1% over the past two years.

However, there has been a building boom for apartments and that is working in renters’ favor.

In June 2024, nearly 60,000 multifamily units were completed across the United States, according to government data — the biggest increase in supply since 1973. That made it harder for landlords to fill some units. The rental vacancy rate is 6.6%, the highest it has been since the winter of 2021.
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After July’s big jobs miss, experts say a 50bps cut should be on the table

August 2, 2024
Experts are criticizing the Federal Reserve for being behind the ball after July’s jobs report showed a weakening labor market, two days after the Fed decided to leave its interest rate unchanged. Economists say the Fed’s restrictive monetary policy is now hurting the once-robust labor market.

In July, the U.S. economy added 114,000 jobs, a huge miss from the 175,000 jobs expected. Unemployment ticked up to 4.3% from 4.1% in June.

“I think that all of those indicators tell us that the Fed needs to act. They should have acted in their last meeting, maybe even a little earlier than that,” said Seth Harris, former Acting and Deputy Labor Secretary under President Barack Obama. “Now the question is, how big of a bump do they need to give? Is it 25 basis points? Is it 50 basis points?

“Let me just say, nobody was talking about 50 basis points before this report,” he added. “I think we’re now going to see people talking about 50 basis points and some folks will even talk about more. So I think that this report really sends a signal to the Fed. The boat is pulling out, the train is leaving the station, whatever analogy you want to use, and they need to get on board.”

Fed Chair Jerome Powell hinted that a September rate cut could be on the table during a press conference Wednesday, June 31, ahead of Friday’s jobs report.

The Fed is holding its interest rate at a two-decade high in an effort to tame inflation, but Harris said the weakening labor market requires a more decisive approach.

“Go ahead and cut rates aggressively and send an indication that you really are concerned about growth and you’re also concerned about employment,” Harris told Straight Arrow News. “To me, a 25 basis point cut was signal sending. It wouldn’t have had a dramatic effect on the economy directly, but by sending the signal that their concerns about inflation have been reduced, that inflation descended to a level that suggests that we’re going to be just fine in that area, but that they are also concerned about growth and employment.

“That was signaling, not policymaking. Now, I think they have to think about policymaking. After seeing these numbers, I think they have to think about policymaking.”
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