President Donald Trump has inherited an economy marked by 21.2% consumer price increases from January 2021 to December 2024 under former President Joe Biden. While inflation has cooled to 2.7% in Trump's second term, higher prices persist for Americans. Economists attribute the surge to stimulus packages enacted by both leaders during the COVID-19 recovery.
The transition between Presidents Joe Biden and Donald Trump highlights the interconnected economic legacies in modern U.S. history. Biden took office in January 2021 amid an average inflation rate of 1.9%, bolstered by two major stimulus measures from Trump's first term. In March 2020, Trump signed the $2.2 trillion CARES Act, which passed unanimously in the Senate and 388-5 in the House, with the opposing votes from Republicans worried about federal deficits. This was followed in December 2020 by a $900 billion relief package, approved 359-53 in the House despite opposition from 50 Republicans and six GOP senators, as a compromise on spending and benefits.
Biden then enacted the $1.9 trillion American Rescue Plan in March 2021, more than double the size of Trump's last package, distributing $1,400 checks without any Republican support. These measures, economists argue, fueled inflation as the economy recovered. Biden's term saw an average inflation of 4.9%, peaking at 9.1% in June 2022, compared to Trump's first-term average of 1.9% and peak of 2.5%.
"Both Trump and Biden contributed to the fiscal stimulus that fed into the inflation," noted George Selgin, a senior fellow at the Cato Institute. Economist Peter Morici added, "It was irresponsible to do stimulus when the economy was well on its way to recovery. Blame is falling where it’s due. Biden does bear responsibility for the endurance of COVID inflation."
Trump's administration defends its record amid cooling prices. Press Secretary Karoline Leavitt stated, "Every economic metric does in fact show that the economy is getting better and brighter than where it was under the previous administration," following November's 2.7% inflation and 4.3% GDP growth. Credit for the 'soft landing' goes to Federal Reserve Chair Jerome Powell and Senator Joe Manchin, who blocked further spending. As Republican Senator John Kennedy remarked to Powell, "I never imagined that our landing could be this soft." Despite progress, elevated prices continue to challenge voters and shape political defenses.
