Money has a funny way of making people remember things differently than they actually happened. When you look back at what was inflation under trump, the numbers tell a story that's a lot quieter than the political shouting matches might suggest. Honestly, for the first three years, the price of a gallon of milk or a new set of tires didn't change enough to make anyone lose sleep.
Basically, the inflation rate stayed in a very tight "sweet spot." It was high enough to show the economy was growing but low enough that your paycheck didn't feel like it was shrinking every time you went to the grocery store.
The Boring (But Great) Numbers
If you’re looking for a roller coaster, you won't find it here—at least not until 2020.
In 2017, when Donald Trump took the oath of office, the annual inflation rate sat at 2.1%. To put that in perspective, the Federal Reserve usually aims for 2% as their "Goldilocks" number. Not too hot, not too cold.
The following year, 2018, it dipped slightly to 1.9%. Then in 2019, it ticked up to 2.3%. If you were living through it, you probably didn't even notice. Your rent might have gone up a few bucks, and maybe your favorite burger joint added fifty cents to the menu, but it wasn't a "crisis." It was just normal life.
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Why was it so stable?
Economists like Steve Moore or the folks over at the St. Louis Fed point to a few things. First, energy prices were relatively low. When it’s cheap to move goods across the country, the goods themselves stay cheaper. Trump’s "maximum pressure" energy policies and deregulation definitely played a role in keeping those costs down.
Then you had the tax cuts in 2017. Usually, when you pump money into an economy with tax cuts, you worry about "overheating" and causing inflation. But since the global economy was still a bit sluggish and tech was making everything more efficient, that extra cash didn't immediately turn into higher prices.
The 2020 Pivot
Then came the pandemic. Everything we knew about supply and demand got tossed out the window.
In 2020, inflation actually plummeted to 1.4%. People weren't buying plane tickets. They weren't going to movies. They were sitting at home, worried, and the lack of spending caused prices to stay flat or even drop in some sectors.
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But then, the seeds for future inflation were sown.
- Stimulus Checks: Trillions of dollars were pumped into the system via the CARES Act.
- Supply Chain Snarls: Factories in China shut down.
- The "Great Reset": People stopped working, and suddenly, there weren't enough truck drivers to move the stuff we were ordering on Amazon.
By the time Trump left office in January 2021, the monthly inflation rate was starting to creep up, but it was still only around 1.4% to 1.7% on an annual basis. The "inflation explosion" that everyone remembers—the 7%, 8%, and 9% numbers—didn't actually hit until later in 2021 and 2022.
Real Wages vs. Prices
Here’s the part most people get wrong. Inflation doesn't matter much if your raises are bigger than the price hikes. Under Trump, for most of the term, real wages (that's your pay adjusted for inflation) actually went up.
According to data from the Bureau of Labor Statistics, real median household income hit an all-time high in 2019. You weren't just keeping up; you were actually getting ahead. It's a stark contrast to the "vibes" of the later 2020s where everyone feels like they're running on a treadmill that’s moving too fast.
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The Tariff Factor
We can't talk about this without mentioning the trade wars. Trump loved tariffs, especially on China.
Standard economic theory says tariffs are basically a tax on consumers. If you put a 25% tariff on imported steel, the guy making washing machines has to raise his prices. While there were definitely "micro-spikes" in things like washing machines (which famously jumped in price in 2018), the overall, broad inflation rate didn't really budge.
Why? Because companies often ate the cost to keep their market share, or they moved their manufacturing to places like Vietnam to avoid the tax. It was a game of cat and mouse that kept the "inflation monster" under the bed for a while longer.
What can we learn from this?
Looking back, the Trump years were a period of "low-volatility" inflation. It was a predictable era for your wallet.
- Monitor the Fed: The Federal Reserve’s "target" of 2% is the anchor. When inflation stays near that, the economy feels stable.
- Energy is King: Keep an eye on oil and gas prices. They are the leading indicator for almost every other price in the grocery store.
- Watch the Debt: The massive spending started in 2020 under Trump and continued under Biden. Inflation is often a "lagging" indicator—the bills for today's spending usually come due eighteen months later.
If you're trying to manage your own budget today, the best move is to look at your personal "inflation rate." Are you spending more on gas or housing? Focus your savings there. The "Trump era" showed us that when energy is cheap and the supply chain is moving, your dollar goes a lot further.
To get a better handle on your current finances, you should track your "Cost of Living" index specifically for your city, as national averages rarely tell the whole story for the individual.