The latest inflation data show consumer prices rose an average of less than 0.1 percent in May, a total rebuttal to mainstream media forecasts that President Trump’s economic policies wound cause catastrophic inflation. Instead, the monthly rate of prices increases has fallen by four-fifths in just four months. And there’s more good news ahead for Americans.
No one should be surprised that most “experts” got their predictions so wrong about Trump causing inflation. After all, these are the same people, by and large, who hilariously predicted Biden’s runaway spending wouldn’t cause any inflation. The joke was on them—and the American people, who suffered the fastest rise in prices in four decades.
In January, Biden handed Trump an economy with prices rising about 0.5 percent in a single month, equivalent to 5.7 percent per annum. In May, this annualized rate had fallen to just 1.0 percent, which is half the Federal Reserve’s 2.0 percent target annual rate.
Before Biden was president, inflation averaged a tame 1.8 percent from the end of the Great Recession in 2009 through 2020. During the first 18 months of his presidency, however, annualized inflation was an eye-watering 8.6 percent, then averaged a lower but still elevated 3.1 percent annualized rate for the rest of his term. The result was the current cost-of-living crisis.
But Trump has managed to put the brakes on inflation in only four months, delivering an annualized inflation rate of just 1.4 percent. That’s less than the Fed’s target inflation rate, let alone anything seen during Biden’s tenure.
The cool inflation numbers are due in part to average energy prices falling 2.5 percent under Trump. Because energy affects all other prices throughout the economy, this is bringing widespread relief. And it’s only possible because the White House is no longer in a de facto war with reliable domestic energy production, including coal, oil, and natural gas.
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Despite the great progress these last four months against inflation, the annual increase in the consumer price index (CPI) rose from 2.3 percent in April to 2.4 percent in May.
Additionally, the core CPI (which excludes food and energy) remained at 2.8 percent for the third month in a row. But these annual figures remain high because of what happened in 2024, not 2025.
For example, the CPI had a relatively small increase from April to May 2024, but while that change was part of the annual increase in the index from April 2024 to April 2025, it’s excluded from May’s year-over-year calculation. So, although the annual inflation rate didn’t fall last month, prices were actually rising slower in May.
There’s even better news with wholesale inflation, which measures the rate of increase for prices paid by businesses. That cumulative inflation rate is zero for the period from January through May. In other words, these prices are right where they were when Trump took office. That’s remarkable since wholesale inflation was an annualized 8.5 percent when Biden left office.
This is cause for celebration because the prices paid by businesses are an important indicator of what is likely to happen to consumer prices in the future. Instead of fanning the flames of inflation, Trump’s economic agenda is smothering it with both consumer and wholesale inflation moving in the right direction.
But the measure with which most Americans are concerned is what they can buy with their weekly paychecks. Under Biden, prices rose so much faster than wages that inflation-adjusted average weekly earnings fell 4 percent from January 2021 to January 2025, despite wages rising 19.8 percent over that time.
Conversely, with Trump back at the helm, inflation-adjusted weekly earnings were up 1.3 percent in May compared to when he took office in January of this year. That means not only are paychecks getting big but—more importantly—they can buy more. Just four years on the job, the president is already reversing the financial pain and cost-of-living crisis left by his predecessor.
Trump just keeps winning on inflation, and that means America is winning too.
E.J. Antoni, Ph.D., is the Chief Economist and Richard Aster fellow at the Heritage Foundation and a senior fellow at Unleash Prosperity.
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