Dem
51
GOP
49
One of Donald Trump's best arguments is about eggs. They cost more than they used to and people don't like it. Of course, wages are up too, but he doesn't talk about that. In any event, the rate of increase of prices, which is what inflation really is, is way down. A new Consumer Price Index report out yesterday confirms this. CPI rose 2.9% for the last 12 months, the first time it was under 3% since July 2021. Core CPI, which excludes food and energy, was up 3.2%, the smallest increase in 3 years. For the past 3 months, core CPI is up only 1.6% on an annualized basis. This is very low.
The problem for Kamala Harris is that only people with at least a masters degree in economics understand any of this. To most people, since eggs cost more than they used to, there is still inflation. People don't understand that if the price of something is stable for several years but is still more than it was 5 years ago, that means there is no inflation. Inflation is the year-to-year change in prices, not this year's price vs. some historical price years ago. It will be a tough sell for her.
What she can try to do is cherry pick a few items and talk about them. Grocery prices are up only 1% compared to last year. People are very sensitive to that since they typically go shopping every week. One area where prices have gone up a lot is housing. That is not something most people notice, though. People don't buy a new house every week. And even for renters, it is less noticeable because many people have a 12-month lease and would see rent increases only when it is up.
There is a lot of speculation about what the Fed will do at its next meeting. If it lowers interest rates in response to the lower inflation, that helps some people and hurts others. It helps people with outstanding loans of any kind that are tied to variable interest rates. It helps businesses that want to borrow money to expand. On the other hand, it hurts people, especially seniors, who have money in the bank and live off the interest. That all said, if the Fed lowers interest rates in September, there will be a lot of news stories about "Inflation is finished" and even if people don't understand what inflation is actually, it will help the Harris campaign to be able to quote the Fed chairman and various economists about inflation finally being beaten and will help neuter Trump's attacks that it is her fault that eggs cost more than they used to. (V)