Just one month on the job, President Donald Trump has already overseen a dramatic improvement in the economy, with the monthly inflation rate being cut in half. By any measure, inflation improved significant in February and the Trump administration is perfectly positioned to not only slow inflation further, but eventually bring prices down.
For the month of February, the first month of the Trump administration, the consumer price index (CPI) increased just 0.2 percent from January. That was less than half the 0.5-percent increase in prices from December to January, the last month of the Biden administration.
What makes the February slowdown of inflation more dramatic was that it was preceded by seven months of inflation reaccelerating. Put simply, Biden handed Trump an inflation mess that was getting worse, not better—at least, not until Trump started reversing Biden’s radical agenda.
INFLATION EASES IN FEBRUARY, BUT TRUMP TARIFFS COULD DERAIL PROGRESS
And what a reversal it has been! Instead of strangling reliable American energy production, the new mantra is “drill, baby drill.” Instead of additional burdensome regulations, Trump pledges to cut bureaucratic red tape. Instead of never-ending-multi-trillion-dollar deficits as far as the eye can see, Trump wants to balance the budget.
Whether it’s tax rates, international trade, or DOGE and wasteful government spending, the Trump administration is doing exactly the opposite of its predecessor, and the results are heaven-sent for an American people that has been ravaged by inflation.
In February, the annual inflation rate measured by the CPI fell, but so did “core” CPI, an index which excludes the volatile categories of food and energy. In fact, the annual rate of core inflation fell to its lowest level since April 2021.
Core inflation is closely watched because it is a way of removing outliers. If food or energy prices temporarily change quickly, like when egg prices spiked and then began falling, core inflation can give a better sense of which way inflation is trending over the long haul.
INFLATION SLOWED SLIGHTLY TO 2.8% IN FEBRUARY AHEAD OF FEDERAL RESERVE MEETING
Fortunately, other methods of removing outliers from inflation metrics also showed significant improvement in February. One such statistic, median CPI, fell to its lowest level since October 2021. Another of these statistics, the trimmed-mean CPI, dropped down to the lowest level since July 2021.
These declines are significant because they show the slowdown in inflation is very widespread. It’s not as if only one or two items within the CPI are seeing slower price growth or price declines. Instead, the vast majority of components in the CPI saw slower price growth in February.
Even better, an increasing number of prices are not only growing slower but are outright declining. It’s happening with eggs, gasoline, and airfares. Things are clearly headed in the right direction.
That being said, momentum is an incredibly powerful force in physics and economics. The Trump administration is effectively trying to stop a freight train, then make it change direction. That will take not only a Herculean effort, but also time.
Similarly, Biden was handed a very low annual inflation rate of just 1.4 percent and, although he began implementing inflationary policies literally on day one, it wasn’t until 18 months later that annual inflation rate peaked at four-decade highs.
By that point, prices were rising in a single month about as fast as they did in the entire year before Biden took office. That dramatic increase took time, however, and it’ll take time to kill inflation completely.
February was a great first step and if the Trump team keep at it, they will get America the rest of the way to price stability.
As Treasury Secretary Scott Bessent describes it, this effort is a whole-of-government approach. Bringing down inflation involves the Treasury working on tax cuts, the Department of Energy working on oil, gas, and coal production, the Department of Commerce working on internation trade, and nearly every department working on regulatory reform.
It is all hands on deck in the Trump administration to grow the economy while reducing prices. It’s only the first inning, but they’re off to an early lead.
E.J. Antoni, a public finance economist, is the Richard F. Aster fellow at the Heritage Foundation and a senior fellow at Unleash Prosperity.
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