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How do CPI and PCE inflation measures differ when comparing Biden and Trump administrations?
Executive summary
CPI and PCE are two official U.S. inflation measures that differ in methodology, scope and typical readings: historically the CPI runs higher than PCE by roughly 0.2–0.4 percentage points on average, and contemporary reporting in 2024–25 shows CPI above PCE by about 0.2 points in mid‑2025 (e.g., PCE 2.7% vs CPI a bit higher) [1]. Different commentators and administrations selectively cite one series or the other to support claims about whether “inflation was worse under Biden” or “improved under Trump” [2] [3] [4].
1. Two yardsticks, two stories: why CPI and PCE diverge
CPI (Consumer Price Index) and PCE (Personal Consumption Expenditures price index) measure broad consumer prices but use different baskets, formulas and data sources: CPI is based on a fixed surveyed basket and out-of-pocket prices collected by the BLS, while PCE—used by the Federal Reserve—draws on business surveys and allows changing weights to reflect substitutions consumers make; historically CPI has exceeded PCE by about 0.36 percentage points over 20 years and the two can move differently month to month [5] [1].
2. The practical difference for political comparisons
Because CPI tends to be higher and responds differently to changing consumption patterns, a politician who wants to stress that inflation is “still high” is likelier to cite CPI numbers, while a policymaker emphasizing progress toward the Fed’s 2% target will cite PCE because that is the Fed’s metric [5] [1]. Both sides in 2024–25 did exactly that: FactCheck and other trackers reported a 21.5% cumulative CPI increase during Biden’s four years to January 2025 as one headline figure used to criticize the administration, while White House messaging for both administrations selectively highlighted averages or peaks to bolster their narratives [2] [3].
3. What the mid‑2025 data actually showed
Contemporary fiscal and market commentary in 2025 placed headline PCE at roughly 2.7% year‑over‑year in mid‑2025, with CPI generally a few tenths higher—the Treasury noted that over the year through August 2025 headline PCE was 2.7%, about 0.2 points below headline CPI for that month, and that over the prior 20 years CPI exceeded PCE by about 0.36 points on average [1]. Analyses of Biden’s four‑year term emphasize a sizable cumulative CPI rise (21.5% cited by FactCheck for 2021–Jan 2025), whereas early months of Trump’s second term showed more modest year‑over‑year CPI/PCE readings but also new policies (tariffs) that analysts warned might raise prices later [2] [6] [7].
4. How measurement choices reshape claims about “whose economy was worse”
Claims that “inflation averaged nearly 5% under Biden” or that “inflation dropped to 2.7% under Trump” hinge on which series, which months, and whether one uses averages, peaks, or year‑over‑year snapshots [3] [6]. Independent fact‑checks stressed nuance: for example, PolitiFact noted that headline readings depend on the measure and whether food and energy are stripped out—core inflation showed only modest declines early in Trump’s term relative to Biden’s last months [4]. In short, apples‑to‑apples comparisons require specifying CPI vs PCE, the start/end months, and whether one uses headline or core series [5] [4].
5. The role of policy and timing beyond the raw indexes
Observers highlighted that policies and shocks—pandemic stimulus, supply disruptions, and then Trump’s 2025 tariffs—affected price trends differently over time, so short‑term improvements in one index do not alone prove causal policy success [6] [8]. Some outlets and the White House credited administration actions for recent declines; others warned tariffs, fiscal shifts or delayed pass‑through effects could push inflation back up even if CPI/PCE fell modestly in the first months [3] [7] [8].
6. How to read competing claims responsibly
When comparing “inflation under Biden vs. Trump,” check which series is cited (CPI vs PCE), the time span, and whether the number is headline, core, an average, or a peak; expect roughly a 0.2–0.4 point gap between CPI and PCE historically and in 2025 [5] [1]. Independent fact‑checks and Treasury analysis recommend avoiding single‑number soundbites: both administrations and partisan outlets have selectively emphasized the measure that best supports their narrative [2] [3] [4].
Limitations and unanswered items: available sources do not mention a single standardized “presidential inflation” measure agreed across analysts; they do not provide a unified month‑by‑month CPI vs PCE table for the full Biden and Trump periods in one place in the provided excerpts (not found in current reporting).