Rahul Tandon (3:39)

If we look at those numbers that have just come out that you're talking about there, we can see certain sectors, groceries, restaurant, meals, they have all gone up more than that number that you gave us.

Samira Hussein (3:52)

Yeah, absolutely. If you look at specifically some of the food items, things like meat, poultry and eggs, that has gone up significantly.

Rahul Tandon (4:00)

And when we have that number, 2.7%. How does that compare to what we've seen over the last few years?

Samira Hussein (4:07)

When Mr. Trump came into office in January of 2025, inflation was at about 3%, and now it's fluctuated between 3%, 2.7% throughout the year to where we are now at 2.7%. So is inflation high? Well, it's higher than what the Federal Reserve, American Central bank would want it to be at. They sort of aim for 2%, but it's certainly not the 9% that we saw at the height of the pandemic under Joe Biden back in June of 2022. But remember, those were really issues related to supply chains. Remember how hard it was to get any kind of goods and things weren't moving, ships weren't moving, nothing was happening. Well, that's why inflation was so high back then. But by the President Trump came into office, inflation was back down around 3%. It's really stayed there during his entire time in office.

Rahul Tandon (5:01)

There is a bit of a paradox here, isn't there? Because if you look at those numbers, and you explained it so well, they are much lower than they were during the pandemic. But if you speak to many Americans, they will tell you that they still feel worse off, even though the numbers don't quite Say that.

Samira Hussein (5:16)

I'll give you a little anecdote. I have just returned from being overseas for the last two years and I've returned back to New York. And when I look at just, just the price increases for basic groceries, one of the problems is is that, sure, economists can look at these basket of goods and assess that, okay, well, inflation has gone up or gone down by a particular percentage. But the problem is also then, well, when does that actually trickle down and how does that impact the actual consumer?

Rahul Tandon (5:46)

Samira, there, with what the figures are telling us, let's bring in another important economic term here, which is real wages. That's how much a paycheck buys after accounting for inflation. Those price rises in the U.S. real wages have been rising for a decade, yet every survey shows us in spite of that, people still feel worse off. Let's hear from some shoppers outside a store in Atlanta, Georgia.

Various US Shoppers (6:14)

Hi, my name is Melina and I live in Georgia. A lot of things I like to buy has gone up. I'm thankful because I can afford it, but it doesn't mean that I always want to pay that. So my grocery bill has actually doubled. The one that costs me the most is meat. To me, it's no reason for eggs to be $6 for a dozen when they were what, 2, 2.30 for a dozen.

Liberty Vitar (6:40)

Hi, my name is London.

Various US Shoppers (6:42)

I live in Atlanta, Georgia. I spend the most on probably meat and eggs. I think it definitely has been huge increase in grocery prices, just not even those things that I listed, just all the way across the board. Okay. My name is Tyreek Johnson and I live in Atlanta. I spend a lot of money on eggs. I spend a lot of money on fish, chicken, all the meat categories. Some of the prices and juices have gone up a little bit too. Like two or $3. They've gone up as well. Most people in this country live paycheck to paycheck and they can't really afford higher prices. They barely can pay their rent. My name is Velma K. And we're residents of Georgia. I'm very price conscious, so I do a lot of buy one, get one free. Under the Trump administration, price of food has gone up considerably, and I'm very conscious of that. And sometimes it's even cheaper for us to eat out as opposed to actually buying groceries.

Rahul Tandon (7:33)

Helping us to try to make sense of this are Liberty Vitar, who's a data science professor at the All In Business School at Washington University. She's also a political commentator. And Oren Cass, who's the Founder and chief economist of the conservative think tank American Compass, who previously worked on the presidential campaigns of Mitt Romney, Oren and Liberty. I'm sure you've heard many comments like that before, but that is what some people in the US think at the moment, isn't it?

Oren Cass (8:01)

Well, there's certainly a perception of that, and I think it reflects a long term building problem with affordability that is leading to people feeling like their budgets are squeezed because they are.

Rahul Tandon (8:12)

And that is interesting. Liberty, what Oren said there, long term affordability problems. This isn't something that should just started today. And let's be honest, we always want things to be cheaper. We all want that, don't we?

Liberty Vitar (8:25)

Well, totally. I mean, when we talk about long term, I mean, prices have gone up forever. You know, I talked to my dad and he remembers when a Coke was, you know, 10 cents. And now at an airport it's like, you know, 13 bucks for a Coca Cola. We see that all the time. And we, we inevitably see people blame it on any administration, whether it's the Biden administration or the Trump administration or whatever. These prices get blamed. If things cost more. We have to look at spikes in trends over time rather than the general trend.

Rahul Tandon (8:54)

And Oren, when we're looking at whether things cost more, we can't have that in isolation, can we? Because wages are an important factor here. So if wages are increasing above prices, then things aren't that bad, are they?

Oren Cass (9:07)

Well, that's exactly right. And that's where I think what we've seen in recent years differs a little bit from that. Just general. You hear your grandpa say that the ice cream cone used to cost a nickel. But, but of course, you know, the, the, what was the hourly wage? Right. And so general economy, wide inflation that leads to gradual increases in prices over time. But if you have wages going up faster than that, it's not something that causes a problem for the typical household. I think what we've seen really in the most recent 30 or 40 years in the United States, though, is that wages have not grown as quickly and in some cases they've, they've been declining in real terms. And so, you know, the research that we've done at American Compass shows that if you look at what your typical especially male worker earns and how much it costs to provide economic security to a family, it really did used to be the case that you could afford it. And, and it really is the case that you can't afford it anymore.

Rahul Tandon (10:04)

And Liberty, that is an important point, isn't it? Because we like to crunch those numbers, don't we? 2.7%, 2.8%. But really, sometimes what is important isn't the percentage figures, it's how people are feeling.

Liberty Vitar (10:17)

Absolutely. I mean, if you can't buy groceries for your family, you don't care whether inflation's 1% or 10%. You can't buy groceries for your family. And you know, if we look at what people tend to look at to decide if they're doing well financially or not, it's gas and groceries. And what we've seen really since COVID is a great rise, especially in groceries. And that's sort of twofold. We had inflation under Biden, we had the COVID issues of supply chain. And then now we're starting to see some real increase in grocery prices given a change in sort of, I guess we call it the Maha make America healthy again agenda. In terms of removing artificial dyes and preservatives for food, it's going to cause prices to increase. Then we see gas. And if you look around the country, gas prices are unbelievably low right now. So, you know, you sort of have to look at this as a what affects the everyday person on the everyday. But who we blame that on, I think is a bigger question.

Rahul Tandon (11:15)

This is Business Daily from the BBC World Service. Nearly home.

Various US Shoppers (11:23)

Isn't home where we all want to be?

Liberty Vitar (11:25)

Reba?

Various US Shoppers (11:25)

Here for realtor.com, the Pro's number one most trusted app. Finding a home is like dating. You're not just looking for a place to live, you're searching for the one. That's where realtor.com comes in. Like any good matchmaker, they know exactly where to look. With over 500,000 new real listings straight from the pros every month, you could find your perfect match today. Ranch style with a pool. Barndominium with an in Law Suite. Realtor.com's got em modern craftsman with a big yard and a treehouse out back. Realtor.com will have you saying yep, that's the one. No more swapping. It's time to start finding. Download TheRealTor.com app today cause you're nearly home. Make it real with realtor.com Pro's number.

Rahul Tandon (12:13)

One most trusted app based on August 2025 proprietary survey. Over 500,000 new listings every month based on average new for sale and rental listings. July 2024 to June 2025. Well, the holidays have come and gone once again. But if you've forgotten to get that.

Zach (Musician) (12:25)

Special someone in your life a gift.

Rahul Tandon (12:27)

But well Mint Mobile is extending their holiday offer of half off unlimited wireless. So here's the idea. You get it now, you call it an early present for next year.

Advertisement Voice (12:36)

What do you have to lose?

Zach (Musician) (12:38)

Give it a try@mintmobile.com Switch limited time.

Liberty Vitar (12:41)

50% off regular price for new customers. Upfront payment required $45 for three months, $90 for six month or $180 for 12 month plan taxes and fees. Extra speeds may slow after 50 gigabytes per month when network is busy. See Terms.

Rahul Tandon (12:53)

I'm Rahul Tandon and today we're asking is the US still facing a cost of living crunch? Helping us to try to make sense of this are Liberty Vitard, who's a data science professor at the Olin Business School, and Oren Kass, who's the founder and chief economist of the conservative think tank American Compass, who previously worked on the presidential campaigns of Mitt Romney. Liberty was talking there about energy and gas. Let's hear Donald Trump talking about those issues. When you see energy coming down like I brought it down and gasoline coming down, that brings everything else down. It's so much bigger than any other factor. When Gasoline gets to be 199 a gallon, everything comes down. The donuts come down. The truck that delivers the donuts, the stove that makes the donuts, the whole thing, it all comes down. Then it's coming down much faster than anybody can even believe. And let's hear from Zach as well on his experiences. He's a musician, he's based in Florida.

Zach (Musician) (13:52)

So last month I paid total housing costs of $2,152. That includes the mortgage payment. Then you have to factor in property taxes, home insurance and flood insurance because I live in a hurricane zone. My electric bill last month in December, which is typically one of the cheapest months of the entire year here in Florida, I paid $175 and 7 cents. If I pull up my spreadsheet from 2020 in December of that year I paid $70 even for my energy bill. All right, we're filling up my car with gas and today looks like it is 258per gallon. Not the most expensive I've ever seen. Couple years ago it was almost four a gallon here. So this is looking pretty good. All right, I'm at the beach for work. I say the cost of parking on this beach has gone up astronomically over the course of the past four or five years. And as a musician who has to work out here all the time, it has really changed the amount of gigs that I can take out here, living in Florida, I need a lot of sunscreen. And this is one of the things I find crazy expensive. All right, so we just got home, undid all the groceries, put them away in the fridge. All in all, I would say all of this stuff has definitely gone up a price over the course of the past few years. It's all slowly just gone up and up and up to where tiny trips like this are getting pretty expensive.

Rahul Tandon (15:17)

Zach talked Oren about electricity. I was looking at some figures that's really important because increasing prices of electricity has outstripped inflation by 10 percentage points since 2019. So there are certain areas where there really is an affordability crunch, and that's one of them.

Oren Cass (15:34)

There's no question that we've had energy policy in the United States for a couple of decades that essentially sought to make energy more expensive.

Rahul Tandon (15:43)

What do you mean by that?

Oren Cass (15:44)

Well, it sought to replace what were the cheapest sources of energy with ones that were more environmentally friendly but cost more. And, you know, they cost more because if they cost less, we. We would already have been using them. And so, you know, this was an area Europe has experienced the same thing, where policymakers made a choice that, frankly, I don't think they ever really sold to voters and that people were not on board with. And so people are now encountering the cost of that trade off.

Rahul Tandon (16:11)

There will be some who say renewables are now cheaper than fossil fuels. But Liberty Oren raises an important point there. We talk so much about this affordability crunch in the US how people are feeling. Why do they feel worse off when the figures don't look that bad?

Liberty Vitar (16:26)

You know, there's not many times in history where multitudes of people have felt like their money goes a really long way. And they have a lot of money as prices increase. And certainly right now, wages are not increasing at the same rate. I mean, I can tell you this in my own job, I am less rich than I was last year because my raise did not match inflation. So, you know, I mean, a lot of people are feeling that way. And I think Arn brings up a really good point with the energy. I mean, under the Obama administration, coal went away. Coal was certainly the cheapest way. And it's one thing to say, okay, well, maybe in certain cases renewables are cheaper. Well, what about all the jobs that were lost and all the people that couldn't make a living for such a long time? There's no free lunch here. I think we have to look at affordability as a whole. And that's when, you know, if you pick a particular sector, there can always be issues. So, for example, one of the big discussions this past week has been that health care is unaffordable and that that has been blamed, you know, most recently on the Trump administration. And whether you like Trump or not, health care has been unaffordable way before Trump was in office. So, you know, that's an American problem, is health care affordability. That's not a Trump or really fairly enough, a Biden problem.

Rahul Tandon (17:34)

Inflation peaked at 9.1% in June 2022. We're nowhere near that figure at the moment. Yet still 44% of Americans, according to the University of Michigan Sentiment survey, worse off than they did a year ago. So how do you tackle that?

Oren Cass (17:50)

I think what we need is a different trajectory for the economy generally. And we're seeing some policy changes in that direction that I think have the potential to produce better wage gains in the long run, maybe slow the growth of some of these costs in the long run. But I think it's really important also, just from a communication perspective, to have leaders who can talk clearly and honestly about what is happening and why. I think something that the Biden administration ran into and the Trump administration is now suffering from as well, is they feel like they have to get up there and say, my plan is going to fix everything immediately. And in fact, things are already getting better. And people look around, they say they.

Rahul Tandon (18:30)

Have to win elections well, but that's fine.

Oren Cass (18:32)

And if those things you were saying were true, they would help you win an election. When they are not true, they just make matters worse. And so I think that's where we need a lot more attention rather than people thinking they're going to find some quick fix or free lunch.

Liberty Vitar (18:45)

You know, we keep blaming the cost of increasing groceries, for example, on Covid. And I think people are kind of tired of hearing that. So it's saying, you know, what are we going to do about it? How are we going to change it? And how do we make it so that people can feed their families? And, you know, the cost of food for people is skyrocketing. To give you a real number, you know, 12 nutri grain bars, which I eat for breakfast all the time, are five bucks. Whereas truvani, which are the healthy version, that would be the MAHA approved, that's $42 for 12 bars. You know, that's an eight and a half time increase. So as states are making these laws, that's going to be real money out of people's pockets. That becomes unaffordable. So we have to be able to talk about these things and really help the American public understand why and where increased costs are coming from and if they want to do it.

Rahul Tandon (19:37)

Thanks to Liberty and Oren for their thoughts there. The US Economy is growing faster than most other high income economies and its stock market is at record highs. But as we've heard on this edition, for many Americans the cost of living crunch is still their number one concern and solving it is not going to be easy. You've been listening to Business Daily with me, Rahul Tandon. This program was produced by Craig Henderson. You can hear more episodes just search for Business Daily wherever you get your BBC podcast.

Samira Hussein (20:21)

Are we Exposed?

Liberty Vitar (20:22)

Security teams ask this every day. Vulnerabilities across network, cloud, AI and OT silos hide the truth and attackers are watching.

Samira Hussein (20:31)

Tenable unifies your tools, teams and data.

Liberty Vitar (20:34)

So you can spot and close risks fast. Tenable's AI powered exposure management gives teams one view of risk, helping them focus, take action and close critical exposures fast.

Samira Hussein (20:46)

Visit tenable.

Liberty Vitar (20:47)

Com Tenable. Your exposure ends here.