Year to Year Inflation Rate under Trump and Biden

[tz620q]

Year to Year Inflation Rate
Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ave
2024	3.1	3.2	3.5	3.4	3.3	3	.
2023	6.4	6	5	4.9	4	3	3.2	3.7	3.7	3.2	3.1	3.4	4.1
2022	7.5	* 7.9	8.5	8.3	8.6	9.1	8.5	8.3	8.2	7.7	7.1	6.5	8
2021	1.4	1.7	2.6	* 4.2	5	5.4	5.4	5.3	5.4	6.2	6.8	7	4.7
2020	2.5	2.3	1.5	* 0.3	0.1	0.6	1	1.3	1.4	1.2	1.2	1.4	1.2
2019	1.6	1.5	1.9	2	1.8	1.6	1.8	1.7	1.7	1.8	2.1	2.3	1.8
2018	2.1	2.2	2.4	2.5	2.8	2.9	2.9	2.7	2.3	2.5	2.2	1.9	2.4
2017	2.5	2.7	2.4	2.2	1.9	1.6	1.7	1.9	2.2	2	2.2	2.1	2.1

Source

Looking at the inflation rate throughout Presidents Trump and Biden shows a picture that bears out what Trump has said and discredits Biden's saying that he inherited high inflation from Trump.

The first bolded date in April, 2020 was when the CARES act started making payments to individuals and businesses for Covid relief. Watching the months after this largest in history (to that time) economic stimulus package was spent sees that the effect on inflation was minimal.

The second bolded date in April, 2021 was when the American Rescue Plan payments kicked in (starting in March, 2021). The Republicans that voted against this even larger economic stimulus package (1.9 trillion versus the Republican counter bill of 600 billion) said that it would overheat the economy and lead to inflation. Looking at the sudden rise in inflation rates after the payments started shows that that is exactly what happened.

Finally the top bolded date of February, 2022 is when Russia invaded Ukraine. As can be seen, the inflation rate was already 7.9 percent before the invasion. So blaming the spike in inflation rates on the invasion is revisionist. It might have had some effect on where the peak of 9.1 percent finally fell; but inflation actually started going down and has continued going down throughout the war in Ukraine (mainly due to increased Fed rates that spurred increasing borrowing rates on nearly all credit).

 

[Always in His Presence]

QFT. Numbers don’t lie. They show the steady decline under Trump and the exponential rise under Joe

 

[essentialsaltes]

The first bolded date in April, 2020 was when the CARES act started making payments to individuals and businesses for Covid relief. Watching the months after this largest in history (to that time) economic stimulus package was spent sees that the effect on inflation was minimal.

Nobody should expect inflation to instantly spike, particularly when the economy was cratering due to the pandemic.

 

[tz620q]

Nobody should expect inflation to instantly spike, particularly when the economy was cratering due to the pandemic.

I agree; but the rules of economics apply even during a pandemic. If you have too few goods being chased by too much money, it should not be a surprise when the cost of goods go up. I think we could have a good discussion on what the other factors were that led to masssive inflation increases; but I would like to offer one further point of data. During the subprime mortgage crisis of 2008, the inflation rate topped out in the 5 percent range. A lot of this is not about the situation that you find yourself within; but how you react to it. That reaction is what sets the trajectory for the recovery.

Looking back on this it is clear that everyone overreacted to the pandemic. This is not a criticism. When faced with sudden, deadly circumstances with limited data, overreaction is probably preferable to underreaction. One could make a case that Trump overreacted when he shut everything down. The issue that I have is that as time went on we got more and more data on the effects of the disease on various populations. At the same time the virus mutated to be less deadly; but more transmissible (a mutation that benefits the virus). So with that new knowledge, we needed to reassess our reaction. Instead of that and in spite of having a vaccine, Biden did not pull back on the overreaction; but actually went farther. This improper reaction to circumstances has been an issue in the Biden administration throughout. There is a maxim that good judgement comes from experience and experience comes from bad judgement. One would think that Joe Biden with all of his experience in Congress and as VP would have better judgement.

 

[Hammster]

Nobody should expect inflation to instantly spike, particularly when the economy was cratering due to the pandemic.

The handling of it was horrible. And yes, it started with Trump. But Biden showed up and said “hold my beer”.

 

[iluvatar5150]

Year to Year Inflation Rate
Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Ave
2024	3.1	3.2	3.5	3.4	3.3	3	.
2023	6.4	6	5	4.9	4	3	3.2	3.7	3.7	3.2	3.1	3.4	4.1
2022	7.5	* 7.9	8.5	8.3	8.6	9.1	8.5	8.3	8.2	7.7	7.1	6.5	8
2021	1.4	1.7	2.6	* 4.2	5	5.4	5.4	5.3	5.4	6.2	6.8	7	4.7
2020	2.5	2.3	1.5	* 0.3	0.1	0.6	1	1.3	1.4	1.2	1.2	1.4	1.2
2019	1.6	1.5	1.9	2	1.8	1.6	1.8	1.7	1.7	1.8	2.1	2.3	1.8
2018	2.1	2.2	2.4	2.5	2.8	2.9	2.9	2.7	2.3	2.5	2.2	1.9	2.4
2017	2.5	2.7	2.4	2.2	1.9	1.6	1.7	1.9	2.2	2	2.2	2.1	2.1

Source

Looking at the inflation rate throughout Presidents Trump and Biden shows a picture that bears out what Trump has said and discredits Biden's saying that he inherited high inflation from Trump.

The first bolded date in April, 2020 was when the CARES act started making payments to individuals and businesses for Covid relief. Watching the months after this largest in history (to that time) economic stimulus package was spent sees that the effect on inflation was minimal.

The effect on inflation was minimal? Inflation bottomed out at 0.1% year-over-year in May 2020 and then rebounded to 1.4% by September. That's a 1300% increase. A second round of checks when out in December of 2020.

The second bolded date in April, 2021 was when the American Rescue Plan payments kicked in (starting in March, 2021). The Republicans that voted against this even larger economic stimulus package (1.9 trillion versus the Republican counter bill of 600 billion) said that it would overheat the economy and lead to inflation. Looking at the sudden rise in inflation rates after the payments started shows that that is exactly what happened.

The American Rescue Plan was signed on March 11. Inflation was already on the rise at that point - in March, it was up to 2.6%. Somehow, this third round of checks caused it to climb to 4.2% in just a matter of weeks, even though large chunks of the spending hadn't even been doled out yet? Yeah, I don't think so. You're confusing correlation for causation.

 

[Richard T]

You have some good data on the exact dates that inflation was measured but the dates are lacking in the cause of inflation because of the time lag it takes for inflation to show up. "Two more recent estimates from U.S. central bankers put the time that it takes for changes in monetary policy to affect inflation at 18 months to two years and at nine months to a year, the author noted." What Are Long and Variable Lags in Monetary Policy?

To many, money supply expansion is the biggest long term determinant on inflation. The President has little to do with the money supply except for the budget deficits they create with Congress. If you use this link and click under the ten year chart, United States Money Supply M2 you will see that M2 was expanded during the Trump years, allowing inflation to peak in 2022. Now the Federal Reserve has been more restrictive so that M2 has settled down and inflation has been somewhat tamed. I am no Biden supporter, but he and Trump are very similar in busting the budget. They both show disregard for deficits and future inflation.

 

[tz620q]

You have some good data on the exact dates that inflation was measured but the dates are lacking in the cause of inflation because of the time lag it takes for inflation to show up. "Two more recent estimates from U.S. central bankers put the time that it takes for changes in monetary policy to affect inflation at 18 months to two years and at nine months to a year, the author noted." What Are Long and Variable Lags in Monetary Policy?

To many, money supply expansion is the biggest long term determinant on inflation. The President has little to do with the money supply except for the budget deficits they create with Congress. If you use this link and click under the ten year chart, United States Money Supply M2 you will see that M2 was expanded during the Trump years, allowing inflation to peak in 2022. Now the Federal Reserve has been more restrictive so that M2 has settled down and inflation has been somewhat tamed. I am no Biden supporter, but he and Trump are very similar in busting the budget. They both show disregard for deficits and future inflation.

Good reading. I think the first article on long lags in monetary policy is concentrating on money supply and how that affects and is affected by interest rates. They see long term contracts as a brake on inflation increases. The main driver for inflation during the pandemic was cost of goods, particularly gasoline and diesel. So initially interest rates were fairly stable; but inflation started skyrocketing. This is why I think your second point is more viable.

Here is the 10 year chart from Trading Economics that you linked.

This shows slow and stable growth in monetary supply relative to slow and stable growth in GDP up to the point where the CARES Act started dumping money into the supply through deficit spending. I think it is a reasonable point to say that this change in fiscal policy started the inflation spiral. Factories were shutting down and we were coasting for a few months on what was in the manufacturing and logistics pipeline. The minute those supplies started dwindling, inflation was bound to take off without some contraction in the money supply, which simply cannot react that fast. My main critique of the American Rescue Plan is that it ignored all of these principles and dumped even more money into the mix making the inflation increase even worse to the point where severe increases in Fed Rates were the only way to put a brake on spending. You are right that this changed our monetary policy and led to a leveling off of the money supply; but usually money supply follows GDP. During Biden's administration it seems that money supply has followed ideological principles and not economic principles.

 

[Laodicean60]

Looking at the inflation rate throughout Presidents Trump and Biden shows a picture that bears out what Trump has said and discredits Biden's saying that he inherited high inflation from Trump.

Politicians can make ignorant claims and we believe them, especially in economics. Trump stimulus and partial lockdowns contributed to inflation. Bidens continuing those policies exasperated the problem. Because of the COVID response to blame any president for inflation is wrong.

The President has little to do with the money supply except for the budget deficits they create with Congress.

Boy, do we have budget deficits? The government spending/ stimulus checks increased M1 then M2 because of spending that is why Trump's M2 numbers went up immediately because his lockdown policy wasn't that stringent.
Bidens continued the policy and when people were able to spend, it created supply chain disruptions which increased CPI further.

 

[iluvatar5150]

You have some good data on the exact dates that inflation was measured but the dates are lacking in the cause of inflation because of the time lag it takes for inflation to show up.

The lag is one factor. Another factor is the fact that year-over-year numbers can be skewed by events that happened in the past. For example, if something happens today that causes the price of Commodity X to plummet -even if they completely rebound and everything returns to normal in a couple weeks - then the year-over-year numbers for Aug 2025 are going to look horrible. People will look at them and wonder "what happened in Aug 2025?!?". The answer will be nothing - the crazy thing happened in Aug 2024, and that's what Aug 2025's numbers are based on.

 

[Pommer]

The lag is one factor. Another factor is the fact that year-over-year numbers can be skewed by events that happened in the past. For example, if something happens today that causes the price of Commodity X to plummet -even if they completely rebound and everything returns to normal in a couple weeks - then the year-over-year numbers for Aug 2025 are going to look horrible. People will look at them and wonder "what happened in Aug 2025?!?". The answer will be nothing - the crazy thing happened in Aug 2024, and that's what Aug 2025's numbers are based on.

Aye, the inflation of ‘21 could be lain at the feet on the Tariffs President and his actions that caused cheap foreign good to become expensive foreign goods.

 

[Richard T]

The lag is one factor. Another factor is the fact that year-over-year numbers can be skewed by events that happened in the past. For example, if something happens today that causes the price of Commodity X to plummet -even if they completely rebound and everything returns to normal in a couple weeks - then the year-over-year numbers for Aug 2025 are going to look horrible. People will look at them and wonder "what happened in Aug 2025?!?". The answer will be nothing - the crazy thing happened in Aug 2024, and that's what Aug 2025's numbers are based on.

Yes, the lags are not constant either and volatility is not too uncommon. Part of inflation has been supply disruptions.

Looks like the interest rates hikes are finally working. Biden might own part of the next economic downtrend. If God really wants Trump a big market correction would really do it.

 

[iluvatar5150]

Yes, the lags are not constant either and volatility is not too uncommon. Part of inflation has been supply disruptions.

Looks like the interest rates hikes are finally working. Biden might own part of the next economic downtrend. If God really wants Trump a big market correction would really do it.

Maybe JPow can juice those interest rates a bit and help my 401k recover from the last week.

 

[civilwarbuff]

Forget about inflation and (as the man on dinosaur island said) hold on to your butts. We are about to go into a recession....brought to us by (wait for it) TA TA TA DAAAAAA: The beloved Biden/Harris (or is it really the Harris/Biden) Administration.

 

[civilwarbuff]

Aye, the inflation of ‘21 could be lain at the feet on the Tariffs President and his actions that caused cheap foreign good to become expensive foreign goods.

No understanding of economics, huh?