Donald Trump is failing to meet his election promise to reduce cost of living pressures, with new figures showing Americans are spending more on groceries, shelter and utilities as inflation heats up.
The latest data from the Labor Department showed consumer prices rose 2.9 per cent in August compared to a year ago as companies continued to push the cost of tariffs onto consumers.
The figure marks the highest level since January when Trump returned to the White House.
And in a double whammy for the economy, new data also shows the number of Americans filing for unemployment benefits last week rose 263,000, the worst level in four years, in a sign that the labor market is softening.
“The middle class squeeze on tariffs is here,” Heather Long, chief economist for Navy Federal Credit Union, wrote on X.
“It’s troubling that so many basic necessities are rising in price again: food, gas, clothing and shelter all had big cost jumps in August. And this is only the beginning.”
The latest data comes days before the Federal Reserve’s much-anticipated September meeting next week.
Core inflation, which takes out food and energy and is viewed as a steadier gauge of underlying pressures, rose 3.1 percent from a year earlier.
But despite the uptick, Wall Street remains optimistic that the central bank will likely cut interest rates when it meets next week, amid months of ongoing pressure by the Trump administration.
The meeting will be highly scrutinized as it is expected to include Federal Reserve Governor Lisa Cook, who the president had tried to fire amid unproven claims of mortgage fraud.
But a court on Tuesday blocked the sacking, at least for now, allowing her to remain on the board while a lawsuit she filed against the president’s actions plays out.
The latest consumer price index data revealed that most grocery categories increased in August.
Grocery prices rose by 2.7 percent in August from a year earlier, up from 2.2 percent in July. Coffee surged by more than 21 percent; eggs rose by 10 percent and energy is up 13.8 percent.
The issue is sensitive for the president, who made the economy a central plank of his election campaign against Kamala Harris.
“Starting on day one, we will end inflation and make America affordable again, to bring down the prices of all goods,” he declared last August, in one of many promises to reduce the cost of living for Americans.
He significantly softened his language once he won the election, telling Time Magazine in November: “It’s hard to bring things down once they’re up.”
Thursday’s figures come off the back of Tuesday’s job numbers from the Bureau of Statistics, which showed there were 911,000 fewer jobs than expected for the year prior to March.
The revision, which took in part of Joe Biden’s presidency, was the largest on record.
