Economy

Trump’s new absurdity: ‘Kamala price hikes’ cost a typical family $28,000

“Did you know the Kamala price hikes have cost the average American family $28,000?”

— Donald Trump, in a TikTok video, Aug. 15

“As a result of Kamala’s inflation price hikes, they’ve cost the typical household a total of $28,000. These are numbers coming from the government. They are not coming from me.”

— Trump, media event in Bedminster, N.J., Aug. 15

Former president Donald Trump rarely updates his political rhetoric — he’s using many of the same lines against Vice President Kamala Harris in 2024 that he used against Joe Biden in 2020 — so it’s always news when a fresh talking point emerges.

In recent days, Trump has claimed that the “average American family” or the “typical household” has suffered a hike in spending of $28,000 under the Biden presidency.

The Trump campaign did not respond to queries about how this was calculated. We think we may have figured it out. It makes little sense.

The Facts

In April 2023, we fact-checked a claim by then-House Speaker Kevin McCarthy (R-Calif.) that “families have lost the equivalent of $7,400 worth of income.” That statement came via a dubious statistic generated by E.J. Antoni, a research fellow at the Heritage Foundation.

Other economists were skeptical of Antoni’s math — a combination of two calculations involving purchasing and borrowing costs — and pointed to more reliable metrics, such as real disposable personal income per capita. Many such statistics are affected by the pandemic, adding to the complexity. But real disposable income per capital now is up about $3,000 since March 2020, just before temporary covid relief payments start showing up in the data and skew it for more than a year.

Now, just 16 months later, as inflation is easing, Trump suddenly touts a figure almost four times McCarthy’s number. Trump claimed these were “government numbers,” but economists we contacted scratched their heads about where this could have come from.

One economist suggested that Trump might have been taking total personal consumer expenditures and dividing by total households. But that doesn’t exactly match $28,000, and personal consumer expenditures includes items (stuff the government buys for people like health care, for example) that would exaggerate the impact.

In any case, the experts said Trump is ignoring income gains that have accompanied the rise in prices, putting the finances of many Americans in the net positive territory.

Moody’s economist Mark Zandi, for instance, provided a spreadsheet of data on real personal income less transfer payments from the government per capita. “It has increased 4.2 percent between January 2021 and June 2024,” he said in an email. “A little more than one percent per annum. A solid performance.”

Eventually, we found one possible source for Trump’s figure. In a July blog post, Antoni offered an updated estimate of his statistic — that a typical family lost “about $8,000” in income over the last 3½ years.

That’s still significantly lower than Trump’s $28,000. But the $28,000 number does appear in Antoni’s post.

Antoni focused on a July survey from Bankrate.com that found the average American said they needed an annual income of $186,000 to live comfortably.

“That’s a shocking figure — more than twice what the average full-time worker earns,” Antoni wrote. “Even in a household with two parents pulling in the average full-time salary, they’d still be about $28,000 short annually.”

Could that be the source of the $28,000 figure? It seems absurd, but after nine years of fact-checking Trump we’ve uncovered many slapdash figures. We sent Antoni’s blog post to a Trump campaign spokesman, asking if this was the source of Trump’s number, and did not get a response. Antoni also did not respond to a request for comment.

Oddly, when Bankrate.com conducted this same survey in 2023, Americans said they needed $233,000 a year to be financially secure. So in one year, the surveys indicated a $47,000 improvement — perhaps a sign that as inflation eased, Americans felt less stressed about their finances. A representative for Bankrate.com did not respond to a request for comment.

Earlier this year the Treasury Department released a report that looked at what had happened to the purchasing power of American households since 2019, just before the pandemic. “As of the end of 2023, the median American worker could afford the same goods and services as they did in 2019, with an additional $1,400 to spend or save per year,” the report said.

That’s because, overall, wages have increased more than price inflation.

The Pinocchio Test

It’s never a good sign when a presidential campaign refuses to explain the math behind a new talking point. But it would be par for the course for Trump to misunderstand a random statistic in a blog post and try to twist it for political purposes. In any case, he’s ignoring the gains in income that have exceeded price inflation.

Four Pinocchios

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This post appeared first on washingtonpost.com

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