Today on Morning Joe, Steven Rattner pulls out the data on inflation, gas, drug prices, factories and investment.
Ahead of the midterms, President Donald Trump has returned to a favorite habitat – campaign rallies. Now that he has been back in office for nearly 21 months, he can’t rely only on promises but must instead refer to his actual record. Unsurprisingly, he has once again had to resort to exaggerations and outright falsehoods, given the extraordinary pessimism about the state of the economy. His recent visit to Youngstown, Ohio, to stump for Vivek Ramaswamy and Jon Husted was no different.
Inflation was a chief concern in the 2024 elections, and bringing it down was one of Trump’s core promises. The President boasted that prices are coming “way down,” but the opposite is true, thanks in no small part to his Iran War imbroglio. Not only has headline inflation risen in three of the last five months, to 3.7% in September, as a result of increased oil and gas prices; core inflation likewise increased in September – indicating that elevated energy prices are spilling over into higher prices throughout the economy.
Unsurprisingly, Trump has tried to blame Joe Biden for his self-inflicted inflation headache, alleging that he inherited the “worst inflation in American history.” Even at its Covid-related peak in 2022, inflation under Biden only reached 9% – a fraction of the 15% during the 1980 oil crisis, the 20% in 1947 after wartime price controls were lifted, and the 24% in 1920 after World War I. What’s more, Biden brought inflation down rapidly, lowering it to 2.4% by September 2024 and 3.0% when Trump assumed office.
On top of his tariffs, which pushed up goods inflation after Liberation Day, the central driver of CPI inflation in recent months has been gas prices. As we all now know too well, despite the U.S.’s abundant energy resources, the market for oil is global, and with the ongoing conflict in the Strait of Hormuz – and a new front opened by Houthi attacks on Saudi Arabia – oil prices are up. Consequently, gas prices are up too – currently $4.35 on average, certainly not “lower than when Biden was president.” Under Biden, they averaged $3.46 per gallon and were as low as $3.01 at the end of his term.
The President has had a marginal effect in reducing drug prices. Since sticking to the facts is, of course, never a Trump principle, he’s instead turned to his habit of absurd exaggerations. According to Trump, drug prices are down 300–700%, meaning Americans now pay the “lowest drug prices” in the world. A price can’t fall by more than 100%, but taking the claim at its most charitable – that old prices were 300–700% above new ones – would mean a 75–88% reduction. In reality, prices are down 3.9%, a decrease that hasn’t budged the U.S. position at the top of the ranking for the most expensive drug prices worldwide.
A manufacturing renaissance has been a hallmark Trump bragging point – regardless of what the data says about the sector. According to the President, “we’re building more factories and plants right now than at any time in our history.” We were in fact doing just that – but under President Biden. Construction spending on new factories peaked at $267 billion in today’s dollars in August 2024, and manufacturing employment peaked at 12.9 million in January 2023. While manufacturing employment has begun to recover this year, adding 72,000 jobs after a 93,000 loss in Trump’s first year, factory building has continued its decline and is 31% below its level when Trump took office in today’s dollars.
While the promised factory boom has yet to materialize in the data, Trump still boasts he has negotiated “$21 trillion” in new private investment – in contrast to “less than $1 trillion” under Biden. The basis of the $21 trillion is mysterious, as even his own White House website compiles only $11.3 trillion in company and foreign-government announcements, a likely unreliable number as those investments will take place over years and may never fully occur. Data from the Bureau of Economic Analysis puts business investment under Biden at $14.5 trillion (more than 14 times Trump’s claim). Under Trump thus far, it’s $6.7 trillion, less than a third of the figure he’s bragging about on the campaign trail.
