Aug 30, 2024
In recent years, many Americans have struggled with surging price levels. Although the headline inflation rate has subsided, former President Donald Trump remains concerned about the ongoing challenges consumers face.
At a recent rally in North Carolina, Trump stated that inflation “has been out of control for a long time.” He illustrated his point by pulling two packs of Tic Tacs from his pocket.
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“This is Tic Tacs, right?” he said, holding up a standard pack of Tic Tacs. In his other hand, he displayed a remarkably small pack of Tic Tacs.
“This is inflation, this is what’s happened,” he commented, comparing the two sizes.
Trump’s demonstration with Tic Tacs served as a visual metaphor to underscore how inflation — especially through a process known as “shrinkflation” — diminishes the purchasing power of money. By comparing a standard-sized package to a much smaller one, he highlighted that consumers often receive less for the same amount of money due to escalating price levels.
“Inflation is destroying our country,” he remarked. “It's destroying our families.”
Executive order, bacon and insurance
Trump emphasized that controlling inflation would be a top priority should he win the upcoming presidential election.
“On my first day back in the Oval Office, I will sign an executive order directing every cabinet secretary and agency head to use every tool and authority at their disposal to defeat inflation and to bring consumer prices rapidly down,” he declared.
He then highlighted the tangible impact of inflation on Americans.
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“When you look at the cost of groceries, the cost of bacon, where it went up four or five times. Bacon. I don't order bacon anymore. It's too expensive,” he remarked, eliciting laughter from the crowd.
Grocery prices have soared. Data from the Bureau of Labor Statistics shows that prices for food purchased for home consumption have risen by 25% since the beginning of 2020.
Trump also pointed to surging car insurance costs as another symptom of inflation.
“You look at car insurance, I couldn't believe when I looked at those numbers this morning,” he said. “Car insurance is up 70% to 100% and you can't get it…The whole industry is out of control.”
He added that Americans “have never been in a situation with insurance like it is right now.”
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Car insurance premiums have increased substantially. In July 2024, the motor vehicle insurance index from the CPI’s transportation group stood at 851.007, marking an 18% increase over the past year and a whopping 52% increase over the last four years.
Given these conditions, consumers are advised to shop around for more competitive rates to meet their insurance needs.
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Has the fight been won?
Several experts have already declared victory over inflation.
Last October, Nobel laureate Paul Krugman proclaimed on X, “The war on inflation is over. We won, at very little cost.”
Jeremy Siegel, professor of finance at the Wharton School of Business, expressed a similar view in a November interview with CNBC.
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“We are not going to have any more inflation,” he stated.
In June 2022, the U.S. Consumer Price Index (CPI) saw an annual increase of 9.1%, the largest since November 1981.
However, after significant interest rate hikes by the Federal Reserve, the headline inflation rate in the U.S. has come down significantly. In July 2024, the CPI showed a 12-month increase of 2.9%.
Despite this slowdown in the rate of increase, the high costs of living continue to be a concern as prices remain at elevated levels. Trump noted, “[Inflation] is starting to maybe get under control, but you’re already up 50%, 60%, 70% in so many items.”
Looking back, the rise in prices in the U.S. is striking. The CPI showed a reading of 314.540 in July 2024, a significant increase from 257.971 at the start of 2020.
This indicates that Americans are still contending with price levels that are approximately 22% higher than they were less than five years ago, underscoring the persistent challenges of inflation.
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Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.
