How did inflation and real wage growth differ between the Trump and Biden administrations?
Executive summary
Inflation rose sharply during President Biden’s term, with the Consumer Price Index (CPI) increasing about 21.5% from January 2021 through January 2025 and average annual inflation near 5% over those four years [1] [2]. Under President Trump’s second term so far, headline and core inflation have trended markedly lower — roughly 3% annualized in recent readings — and several outlets report wages have begun outpacing inflation under Trump, reversing the real-wage declines seen earlier in the decade [3] [4] [5].
1. The headline numbers: Biden’s surge, Trump’s cooling
Bureau of Labor Statistics–based tallies summarized by fact-checkers and data outlets show prices rose sharply in Biden’s four years, with the CPI up about 21.5% from inauguration to January 2025 and an average year-over-year inflation rate near 4.95% across that period [1] [2]. By contrast, reporting during Trump’s second term describes inflation running “around 3% annually” or core inflation near 3% (excluding food and energy), a material decline from the pandemic-era peak of about 9% [3] [4].
2. Wages vs. prices: who gained purchasing power?
Multiple analyses note that during Biden’s term wages rose in nominal terms but generally failed to keep pace with rapidly rising prices: one summary finds wages up roughly 19.9% while prices rose 21.5%, producing a modest decline in average hourly earnings adjusted for inflation over the period [6] [1]. Under Trump, outlets—including a White House statement and some fact-checking reporting—say real wages have turned positive in recent months, with wages reportedly outpacing inflation on a year‑over‑year basis, though the timeframe is short and subject to later revision [5] [4].
3. Timing matters: concentrated pain vs. gradual cooling
The bulk of inflation’s damage to purchasing power occurred in a concentrated interval: prices accelerated from roughly 1.7% to about 9% year‑over‑year between 2021 and mid‑2022, during which prices rose much faster than wages and workers lost substantial purchasing power [6]. The subsequent period under Trump shows cooling inflation, so recent wage gains are reversing earlier losses — but that reversal is measured from a high baseline created during Biden’s early-to-mid term [6] [3].
4. Measurement choices change the story
How you measure matters: headline CPI, core CPI (ex‑food and energy), average annual rates, and cumulative inflation over an administration produce different perspectives. PolitiFact and others emphasize that core inflation has declined modestly under Trump (from ~3.2% in Biden’s last month to ~3.0% under Trump) and that whether “overall inflation eased” depends on the chosen metric [4]. Investopedia and SmartAsset provide multi-year averages to compare administrations, showing Biden’s higher multi-year average versus Trump’s lower recent readings [2] [7].
5. Policy, causation, and the Fed: contested attribution
Analysts and the news coverage make clear the Federal Reserve played a major role by tightening policy to bring down inflation — a direction independent of the White House — while presidential policies on fiscal stimulus, tariffs, and other interventions are described as influencing demand, labor supply and costs [7]. Commentators differ on responsibility: Trump’s White House credits its policies for lower inflation and stronger wage growth [5], while outlets like Reuters and The Bulwark warn that tariff-driven higher goods prices and policy missteps can blunt wage gains and that political messaging sometimes downplays ongoing price pressures [3] [8].
6. Public perception and politics: numbers vs. lived experience
News coverage and polling highlight a disconnect between headline improvements and voters’ pocketbook experiences: reporters note that even as inflation fell from its peak, many Americans continued to feel affordability pressures because prices remained above pre‑pandemic levels and cumulative past increases take time to erase [9] [10]. A Newsweek summary of a poll showed voters holding Trump more responsible for current economic conditions in late 2025, illustrating how politics and messaging shape how these technical measures translate into public judgment [11].
7. Limitations and what’s not in the record
Available sources document aggregated CPI changes, multi‑year averages, and recent trends in wages, but they do not provide a single, definitive ledger attributing all inflation or real‑wage movements exclusively to one administration’s policies; the Federal Reserve’s role and global shocks are repeatedly noted [7] [1]. Long‑run durability of Trump’s real‑wage gains is debated and flagged as vulnerable to policy choices like tariffs that could raise goods prices again [4] [3].
Bottom line: Data in the reporting show faster, concentrated inflation and real‑wage losses during Biden’s term, followed by a meaningful cooling of inflation and some reported real‑wage gains under Trump — but differences hinge on which inflation measure and time window you use, the role of the Fed and global factors, and whether tariff or other policies create risks that could reverse recent gains [1] [4] [3].