U.S. Inflation Price by President: From Eisenhower to Biden

A president’s actions can play a task in influencing inflation. Nonetheless, as a result of inflation is a posh phenomenon pushed by a spread of things, the connection between insurance policies and costs isn’t all the time easy.

Inflation is usually among the many high considerations for shoppers because it makes on a regular basis bills, reminiscent of gasoline, groceries, and utilities, costlier. As costs improve, buying energy decreases, which means shoppers get much less for more cash. 

Let’s discover how inflation has fluctuated all through totally different presidential administrations.

When inflation is excessive, the Federal Reserve makes use of financial coverage to sluggish the economic system down by rising the federal funds charge, influencing rates of interest, and making borrowing cash costlier for shoppers and companies. The Federal Reserve has a goal annual inflation charge of two%, and it makes use of financial coverage to maintain inflation in verify and to stabilize the economic system when inflation rises above that benchmark. The Fed, economists, and governments intently monitor the inflation charge to find out if any motion must be taken to stabilize the economic system.

However whose fault is it when inflation rises too excessive or falls too low? How a lot management does the president have over inflation, and the way have the actions of presidents impacted the inflation charge over time? The solutions depend upon the particular financial circumstances and challenges of any interval in time. Nonetheless, the president will be vital in figuring out how the nation responds to a altering economic system and fluctuating costs.

Inflation has additionally traditionally been utilized by presidents and their administrations as a focus throughout elections and is usually among the many high considerations of voters. Under are the typical year-over-year charges of inflation sorted by president, with a quick overview of occasions and financial circumstances that contributed to the numbers.

The common year-over-year inflation charge was calculated by utilizing the Seasonally Adjusted Shopper Worth Index (CPI) for All Gadgets and taking the typical year-over-year modifications during every president’s time period. Because of information availability, the listing begins with the presidency of Dwight D. Eisenhower.

Dwight D. Eisenhower (1953–1961) 

Common YOY Inflation Price: 1.4%

The common year-over-year inflation charge below President Dwight D. Eisenhower was 1.4%. Eisenhower ended the Korean Warfare and had three recessions throughout his two phrases in workplace. Whereas inflation remained comparatively secure and low via the Nineteen Fifties, curbing inflation was a precedence for the Eisenhower administration as there was nonetheless an general worry of inflation amongst Individuals within the wake of the Korean Warfare.

Eisenhower’s administration didn’t stimulate the economic system throughout these instances with a purpose to hold postwar inflation at bay. Eisenhower wished financial development with out inflation and caught to contractionary fiscal insurance policies, as he believed that having a price range surplus was the best way to keep up low inflation. 

John F. Kennedy (1961–1963)

Common YOY Inflation Price: 1.1%

The common year-over-year inflation charge below President John F. Kennedy was 1.1%. Inflation remained comparatively low from the tip of the Nineteen Fifties into the mid-Sixties, a interval recognized for general value stability. Kennedy’s administration helped finish the 1960 recession by rising spending and proposing tax cuts to stimulate the economic system. 

Lyndon B. Johnson (1963–1969)

Common YOY Inflation Price: 2.6%

The common year-over-year inflation charge below President Lyndon B. Johnson was 2.6%. Sworn in simply two hours after Kennedy’s assassination in November 1963, Johnson signed the tax cuts Kennedy proposed into regulation.

Whereas the Johnson administration’s expansionary measures boosted jobs and companies, inflation ticked again up within the mid-’60s. Inflation rose to an annual common of 4.5% in 1966 and hit an 18-year excessive of 5.75% in 1969. 

Richard Nixon (1969–1974)

Common YOY Inflation Price: 5.7%

The common year-over-year inflation charge below President Richard Nixon was 5.7%. Inflation rose larger by the tip of the Sixties after almost 20 years of relative value stability. Whereas Nixon aimed to chill inflation with out inflicting a recession, the Nixon administration’s financial insurance policies led to a decade of stagflation ensuing from financial contraction and double-digit inflation.

The worth of the greenback additionally fell throughout Nixon’s presidency. The aftereffects of Nixon’s financial insurance policies are often known as the Nixon Shock. Inflation below Nixon is the third-highest out of the presidents on this listing.

Gerald Ford (1974–1977)

Common YOY Inflation Price: 8.0%

The common year-over-year inflation charge below President Gerald Ford was 8.0%—the second-highest on this listing. The Ford administration inherited stagflation from Nixon’s time, lower taxes, and diminished regulation to stabilize the economic system. Whereas these insurance policies ended the recession, inflation continued to soar.

Jimmy Carter (1977–1981)

Common YOY Inflation Price: 9.9%

The common year-over-year inflation charge below President Jimmy Carter was 9.9%, the best inflation charge amongst U.S. presidents up to now. Stagflation continued from the Nixon and Ford years and was exacerbated by an vitality disaster that led to skyrocketing gasoline costs and shortages. Whereas larger vitality costs fueled inflation, core inflation (excluding unstable meals and vitality costs) remained excessive via the Seventies.

Throughout Carter’s time period, the distress index—which is the unemployment charge plus inflation—reached a file excessive of 21.98%. The Carter administration’s strategies to chill inflation by lowering the price range deficit and deregulation to extend competitors and restrict value will increase had been thwarted by a surge of vitality inflation in 1979, which pushed inflation over 13% by the tip of 1979.

Ronald Reagan (1981–1989) 

Common YOY Inflation Price: 4.6%

The common year-over-year inflation charge below President Ronald Reagan was 4.6%. To fight the hovering and cussed inflation of the earlier decade, the Federal Reserve elevated the fed funds charge to twenty%.

The Reagan administration’s response to the persistent stagflation was to introduce financial insurance policies that known as for widespread tax cuts, extra army spending, decreased social spending, and deregulation of home markets. These insurance policies, often known as Reaganomics, helped deliver inflation down, however critics of the insurance policies declare they added to the nationwide debt and deficit ranges and in addition widened the wealth hole.

George H.W. Bush (1989–1993) 

Common YOY Inflation Price: 4.3%

The common year-over-year inflation charge below President George H.W. Bush was 4.3%. Inflation ticked up briefly from 1989 to 1991 as gasoline costs elevated in the beginning of the primary Gulf Warfare. The Bush administration additionally confronted a recession brought on by the Financial savings & Mortgage Disaster, which lasted from 1990 to 1991.

Invoice Clinton (1993–2001)

Common YOY Inflation Price: 2.6%

The common year-over-year inflation charge below President Invoice Clinton was 2.6%. Clinton confronted no recessions or main wars throughout his two phrases in workplace. Inflation additionally remained comparatively low throughout this time.

The Clinton administration and insurance policies, often known as Clintonomics, lowered the U.S. nationwide debt and created a price range surplus of over $236 billion by fiscal 12 months 2000.

George W. Bush (2001–2009)

Common YOY Inflation Price: 2.8%

The common year-over-year inflation charge below President George W. Bush was 2.8%. Bush confronted the 2008 Nice Recession, thought-about probably the most vital financial downturn for the reason that Nineteen Thirties Nice Despair. Inflation fell to 0.1% in December 2008 and dipped to unfavourable ranges (deflation, or unfavourable inflation) till late 2009.

The Bush administration despatched out tax rebate checks to supply reduction from the Nice Recession. Bush additionally confronted the 9/11 terrorist assaults (2001) and Hurricane Katrina (2005).

Barack Obama (2009–2017)

Common YOY Inflation Price: 1.4%

The common year-over-year inflation charge below President Barack Obama was 1.4%. Inflation remained comparatively low throughout Obama’s two phrases in workplace.

Having inherited the economic system throughout the Nice Recession, Obama launched the American Restoration and Reinvestment Act (AARA), handed by Congress, and included $831 billion in authorities spending to finish the Nice Recession. The transfer, a part of what’s now often known as Obamanomics, was controversial on the time, with its function in ending the 2008 monetary disaster nonetheless debated in the present day.

Donald Trump (2017–2021)

Common YOY Inflation Price: 1.9%

The common year-over-year inflation charge below President Donald Trump was 1.9%. Inflation remained low throughout Trump’s presidency.

When the COVID-19 pandemic hit in 2020, bringing a quick however extreme recession together with it, the Trump administration declared a state of emergency and handed stimulus measures such because the $2 trillion Coronavirus Support, Reduction, and Financial Safety (CARES) Act in an try to supply reduction to people and companies. The financial insurance policies adopted by the Trump administration at the moment are often known as Trumponomics.

Joe Biden (2021–)

Common YOY Inflation Price: 5.2%*

The common year-over-year inflation charge below President Joe Biden up to now is 5.2%. Biden signed the American Rescue Plan Act in 2021, a $1.9 trillion stimulus bundle to assist the nation get well from COVID-19. Within the wake of the COVID-19 pandemic restoration and the hovering gasoline costs after the Russian invasion of Ukraine in 2022, inflation rose to file ranges not seen for the reason that Nineteen Eighties. Inflation peaked at 9.1% year-over-year in June 2022, the best improve in 40 years.

The Fed responded by elevating rates of interest 11 instances since March 2022 in an try to chill the cussed inflation. Whereas inflation did come down from its 2022 peak in 2023, it nonetheless stays above the Fed’s 2% goal. In September 2024, the Fed made its first charge lower in 4 years. Biden’s financial insurance policies at the moment are known as Bidenomics.

*The common year-over-year inflation charge for the Biden administration was calculated for the years 2021 to August 2024, since Biden’s time period remains to be ongoing.

The Backside Line

Whereas a president’s actions can have an effect on inflation, there are various different elements that should be weighed when evaluating the foundation causes behind value will increase.

The president does affect fiscal coverage, and every president’s financial insurance policies—reminiscent of tax cuts, army spending, and authorities help—definitely do have an effect on the economic system. Nonetheless, many exterior elements outdoors a president’s management—reminiscent of conflict, financial downturn, and public well being crises—additionally contribute to inflation.