Affordability: Biden's Full Term vs. Trump's Second Term to Date

What the Official Numbers Tell Voters About Inflation, Wages, and Purchasing Power

When Americans shop for groceries, fill their gas tanks, or pay the rent, they don't purchase political promises, they purchase necessities.

Every election cycle, politicians promise to make life more affordable. Supporters highlight successes, opponents emphasize failures, and media coverage often focuses on isolated statistics rather than the broader picture.

But affordability should not be measured by campaign speeches or political talking points.

It should be measured by objective economic data.

Fortunately, those measures already exist.

Every month, the U.S. Bureau of Labor Statistics (BLS) publishes the Consumer Price Index (CPI) and average hourly earnings—two of the most widely accepted indicators used by economists to evaluate inflation, wages, and household purchasing power.

The question therefore becomes straightforward:

How does Joe Biden's Democratic Party's full four-year administration compare with Donald Trump's Republican Party's second term so far, using exactly the same official measures?

Understanding Affordability

Affordability is not determined by the price of one product or one month's inflation report.

Instead, economists generally evaluate affordability using three fundamental measurements:

• the annual rate of inflation,
• the cumulative increase in consumer prices, and
• whether wages are keeping pace with those prices.

When wages rise faster than inflation, purchasing power improves.

When inflation rises faster than wages, purchasing power declines.

Using those measures provides a far clearer picture than focusing on isolated headlines.

Inflation: Average Pace and Total Price Increases

The Bureau of Labor Statistics shows a clear difference between the two periods.

Metric	Biden (Jan. 2021–Jan. 2025)	Trump Second Term (Jan. 2025–June 2026)
Average annual inflation	4.95%	3.14%
Cumulative CPI increase	21.8%	5.0%
Highest 12-month inflation	9.1% (June 2022)	4.2% (May 2026)
Most recent 12-month inflation	2.9% (2024 average)	3.5% (June 2026)

During President Biden's four-year administration, consumer prices increased by approximately 22 percent overall.

During Donald Trump's second term to date, consumer prices have risen approximately 5 percent.

Equally important, the average annual inflation rate has been about 1.8 percentage points lower during the current administration than during Biden's full term.

Real Wages: The Measure That Matters Most

Inflation alone does not determine affordability.

The more meaningful question is whether workers' wages have kept pace with rising prices.

Using annualized averages from official BLS data:

Annualized Measure	Biden	Trump (to date)
Average wage growth	4.72%	3.50%
Average inflation	4.95%	3.14%
Purchasing power	−0.23%	+0.36%

Using these annualized comparisons, inflation slightly exceeded wage growth during the Biden administration, resulting in a modest decline in average purchasing power.

During Trump's second term so far, average wage growth has modestly exceeded average inflation, leaving purchasing power slightly ahead on an annualized basis

Everyday Household Essentials

Looking beyond the overall inflation rate reveals how everyday necessities have behaved relative to wages.

Category	Biden Average Annual Increase	Trump Average Annual Increase
Food at home	5.3%	2.7%
Shelter	5.6%	3.3%
Electricity	6.5%	4.0%
Apparel	2.9%	3.9%
Gasoline	10.2%	4.3%
New vehicles	4.8%	0.3%
Used vehicles	8.8%	–1.4%
Auto insurance & repairs	11.4%	2.4%

Several observations emerge.

Food inflation has slowed considerably.

Housing costs remain elevated but have moderated.

Vehicle prices have largely stabilized.

Auto insurance inflation has cooled dramatically.

Some categories, including clothing and electricity, continue to experience upward pressure, partly reflecting tariff changes and infrastructure costs.

Overall, however, a larger share of household necessities has been increasing more slowly relative to wage growth than during the previous administration.

Why Many Families Still Feel Financial Pressure

One important distinction is frequently overlooked in public debate.

Inflation measures how quickly prices are rising, not whether prices return to previous levels.

If inflation falls from 8 percent to 3 percent, prices are still increasing.

They are simply increasing more slowly.

Consequently, households continue to feel the effects of the significant price increases experienced during 2021 through 2023.

Lower inflation does not erase earlier increases.

It merely slows the pace of future increases.

Understanding this distinction helps explain why many Americans still feel financially stretched even though inflation has moderated considerably.

Tax Policy and Disposable Income

Inflation is only one component of affordability.

Take-home pay also matters.

The recently enacted One Big Beautiful Bill Act introduced several temporary federal tax deductions, including provisions related to qualified overtime, reported tips, and interest paid on eligible new U.S.-assembled vehicles.

For many hourly workers and service employees who qualify, these deductions may increase disposable income and partially offset higher living costs.

The precise benefit depends upon each taxpayer's income, employment circumstances, and eligibility.

 What These Numbers Do and Do Not Prove

Economic outcomes are influenced by far more than presidential policy alone.

Inflation reflects numerous factors, including Federal Reserve monetary policy, global energy markets, supply-chain disruptions, wars, productivity, consumer demand, fiscal policy, and international events.

Therefore, these comparisons should not be interpreted as proving that every economic outcome resulted solely from one administration's decisions.

However, they do provide voters with a consistent, objective framework for comparing the economic environment experienced under different administrations using the same official measures.

Bottom Line for Voters

Based on the official Bureau of Labor Statistics data available today, several conclusions emerge.

The average annual inflation rate has been lower during Donald Trump's second term to date than during Joe Biden's full four-year administration.

Average wage growth has slightly exceeded inflation during the current period, whereas inflation slightly outpaced wage growth over Biden's full term.

Many major household expenses, including groceries, housing, vehicle prices, and auto insurance, have also experienced slower rates of increase relative to wages than during the previous administration, although some categories, such as electricity and apparel, continue to face upward pressures.

The substantial price increases that occurred between 2021 and 2023 continue to affect household budgets because lower inflation slows future increases rather than reversing previous ones.

Nevertheless, using the official measures of inflation, wage growth, and purchasing power available today, the economic data indicate that household affordability has performed more favourably during Donald Trump's second term to date than during Joe Biden's full administration.

Financing Costs, Price Levels, and Why Many Families Still Feel Financial Pressure

Although the pace of inflation has slowed, two important realities continue to affect household budgets: financing costs and the higher overall price level left by the inflation surge of 2021–2023.

First, borrowing remains expensive. As of mid-2026, the average 30-year fixed mortgage rate remains around 6.5% to 6.7%, while many credit cards continue to carry interest rates exceeding 20%. Consequently, even when home or vehicle prices stabilize, monthly payments remain substantially higher than they would have been when mortgage rates were near 3% in 2021. Financing costs therefore remain a significant burden for many families.

Second, inflation measures the rate at which prices increase—not the level of prices. A slower inflation rate does not reverse earlier price increases; it simply means prices are rising more slowly.

Using the Consumer Price Index, a basket of goods and services that cost approximately $100 when President Biden took office in January 2021 now costs roughly $122. Most of that increase occurred during 2021 through 2024. Since January 2025, prices have risen by approximately another $5.

Recent federal tax changes may provide some relief for eligible workers. Temporary deductions for qualified overtime premiums, reported tips, and interest paid on qualifying U.S.-assembled vehicle loans increase disposable income for many middle-income households, although the benefits gradually phase out at higher income levels.

Meanwhile, real average hourly earnings have remained broadly stable over the past year, while unemployment has remained relatively low at approximately 4.2%.

Taken together, these facts help explain why two seemingly contradictory observations can both be true.

The annual pace of inflation has moderated, and affordability has improved relative to the previous four years according to official inflation and wage measures.

At the same time, many families continue to feel financially stretched because they are living with the cumulative effects of earlier price increases, elevated borrowing costs, and housing expenses that remain historically high.

Understanding both realities is essential to understanding the true state of affordability.

Restoring Accountability

Affordability should never be reduced to a campaign slogan, a selective headline, or a single monthly statistic chosen to support a political narrative.

Voters deserve comparisons based on the same measurements, over clearly defined periods, using official and publicly available data. That means distinguishing between the rate of inflation and the overall price level, comparing wage growth with the rising cost of living, and acknowledging both improvements and continuing pressures.

No president controls every economic force. Interest rates, wars, energy markets, supply chains, Federal Reserve decisions, productivity, taxation, and government spending all influence household finances. Political leaders must nevertheless remain accountable for the policies they adopt, the conditions over which they exercise influence, and the results experienced by citizens.

Accountability also requires intellectual honesty from the media, economists, political parties, and voters themselves. Facts should not become credible only when they favour one side, nor be dismissed merely because they favour the other.

The evidence available to date does not show that every affordability problem has disappeared. Prices remain high, housing remains difficult for millions of families, and several essential costs continue to rise faster than wages.

But the same evidence does show that inflation has increased at a slower average annual rate during Donald Trump’s second term to date than during Joe Biden’s full administration, while wage growth has performed somewhat more favourably relative to inflation.

That conclusion should not be exaggerated.

Nor should it be concealed.

In a responsible democracy, citizens should judge governments neither by personality nor partisan loyalty, but by measurable results.

Affordability begins with household purchasing power.

Accountability begins with telling voters the truth about it.