Trump Claims Prices Are Falling. Are They?

In a recent prime-time address, President Trump stated that consumer prices in the U.S. are coming down. This claim is misleading. While the rate of price increases has slowed from its peak, prices themselves remain significantly higher than before. This key economic concept, known as "inflation," measures how fast prices rise. A slower rise does not mean prices are dropping. For example, a gallon of milk that cost $3.00 last year might now cost $3.30. If the price next month is $3.32, the rate of increase has slowed. But the price is still higher, not lower, than before. The president's assertion contradicts the experience of most shoppers, who are still paying more for everyday goods like food and rent. Economists confirm that overall price levels have not decreased.