Consumer prices have increased 22.7 percent since January 2021, as Americans are struggling to cope with the lasting effects of the inflation crisis.

According to a Statista Consumer Insights survey, 49 percent of U.S. adults said that the high cost of living was one of the biggest challenges they currently face, making it by far the most common answer.

It is a common misconception that prices come down when inflation cools, when in reality, a period of high inflation leaves a legacy of high prices.

According to the Bureau of Labor Statistics, some categories are seeing even steeper price increases than that.

• Food prices have increased by 25 percent.
• Rents have increased by almost 27 percent.
• Transportation prices are up by 28 percent.

Meanwhile, wages have only grown 21.8 percent since January 2021, leaving many people worse off than they were almost five years ago.

Trump Claims ‘No Inflation’, but Americans Strongly Disagree

On September 10, a day before the latest CPI report showed that consumer price inflation had re-accelerated to 2.9 percent in August, the White House issued a totally bogus statement headlined “President Trump Has Crushed Biden’s Inflation Crisis.”

The statement adds to a stinking river of social media posts from Trump, who repeatedly said that there is “no inflation.”

Earlier this month, Trump even said that prices were “way down” for U.S. consumers – a completely false statement. In reality, overall price levels continue to go up.

In fact, some food staples, e.g., meat, fresh fruit and vegetables and coffee, saw steep price increases in August, with roasted coffee prices jumping as much as 4 percent from July and almost 22 percent year-over-year. These increases are directly related to tariffs, as Brazil is the main source of U.S. coffee imports, and fruit and vegetables are heavily sourced from Mexico, both of which are subject to tariffs.

There appears to be a growing disconnect between President Trump and the American public with respect to inflation. While Trump denies that inflation remains a problem, many Americans are still reeling from high prices.

According to a weekly survey from YouGov and The Economist, inflation has been the most important issue for Americans for the past three years, and it still is. In the latest poll, conducted September 5-8, 21 percent of respondents picked inflation and high prices as the most important issue to them, ahead of jobs and the economy (15 percent) and health care (13 percent).

At the same time, people are increasingly frustrated with Trump’s handling of inflation, with 46 percent of Americans strongly disapproving of the way he’s handling this key issue and another 16 percent somewhat disapproving. Just 32 percent of respondents strongly or somewhat approved of Trump’s handling of inflation, making it the issue he scores worst on.

Consumers Are Still Wary About Inflation Sticking Around

The New York Fed released new figures showing that consumers expect inflation to remain elevated for the foreseeable future.

According to the latest Survey of Consumer Expectations, Americans’ inflation expectations for one year from now climbed for the second consecutive month, reaching 3.2 percent in August.

Meanwhile, the median expected inflation rate three years ahead remained unchanged at 3.0 percent for the fourth consecutive month. This is up from an average of 2.7 percent through 2024 and is a clear sign that consumers are losing hope for inflation to return to the Fed’s target level of 2 percent anytime soon.

Inflation peaked in June 2022 at 9.0 percent and 6.8 percent, respectively. Since then, inflation has dropped as low as 2.3 percent in April 2025 before creeping back up to 2.9 percent in August. Expectations play a crucial role in inflation dynamics, as expectations of future inflation influence wage negotiations and price-setting processes, which then feed into current inflation rates. When expectations of future inflation are high, prices and wages are likely to be set accordingly, creating a self-fulfilling prophecy.

Unemployment Nears 4-Year High as Job Growth Stalls

After the sharp rebound from the pandemic, when the demand for workers exceeded supply by unprecedented margins, the U.S. labor market has gradually cooled.

However, Job growth has nearly come to a standstill, as the economy adjusted to tepid consumer spending, tighter financial conditions and a high degree of uncertainty.

Faced with tariff uncertainty and nagging recession fears, employers became increasingly cautious about adding staff, and while unemployment is still relatively low, it has gradually crept upwards over the past two years, reaching the highest rate since October 2021 in August.

Following a steep downward revision of employment gains in May and June, job growth has nearly dried up halfway through 2025, with the three-month moving average of job additions falling from 232,000 in January to just 29,000 in August.

In his speech in Jackson Hole last month, Fed Chairman Jerome Powell stated that the labor market was in “a curious kind of balance”, resulting from a simultaneous drop-off in labor demand and supply. Despite this balance, Powell found that the risks in the labor market were skewed to the downside, clearing the way for a rate cut in September.