Breitbart Business Digest: Deck the Halls with Tumbling Inflation

Affordability Achieved!

The Inflation Report They Want You to Forget

Welcome back to Friday! This is the Weekly Wrap, where your friendly local Breitbart Business Digest authors bring you the most important overlooked stories of the past seven days.

This week’s wrap is all about the long-awaited consumer price index report released Thursday, the one the legacy media immediately tried to bury because it wrecked their story about America caught in an affordability crisis.

We finally got an inflation report, and it delivered a body blow to the anti-Trump “affordability” narrative being spun out of the legacy media and the captive political party still unreasonably called the Democrats. The Department of Labor—which is in charge of tracking consumer prices for weird historical reasons—said that its consumer price index (CPI) rose by 2.7 percent in November compared with a year earlier. This was a major decline in inflation from the three percent recorded in the prior report.

(iStock/Getty Images)

There was no October CPI report because the Democrats shut down the government for over a month. Not only could the government not release an October report due to the shutdown, it did not even get to collect much of the data that would have gone into constructing the index. So, the October figures will forever be a gap in the long-running series. And because we did not get October numbers, the November report does not include the typical one-month change data.

What we have instead is two-month change figures. Compared with September, the November price index was up 0.2 percent. Of course, you do not have to be a quantitative genius to figure out that this means prices rose by something like 0.1 percent in October and November.

You probably should not care all that much about the one-month change anyway. Most economists, even the good ones, would tell you to look at the three-and six-month annualized rates. Headline CPI was up 2.1 percent on a three-month annualized basis and up 2.8 percent on a six-month annualized basis. Core CPI, which strips out energy and food prices, is up an annualized 1.6 percent in the three-month window and 2.6 percent in the six month window. Both of these are describing very strong disinflationary trends.

Underlying Inflation Looks Even Better

Our favorite place to look for hints about the future of inflation is the median and 16 percent trimmed mean calculations done by the regional Federal Reserve Banks. For CPI, these come from the Cleveland Fed. In October and November, both the median and 16 percent trimmed mean CPI rose by just 0.1 percent for the month. This tells us that the low headline CPI was not driven by outliers.

What about the longer-term view that is likely to be more revealing of underlying trends? The three-month annualized median CPI came in at 1.51 percent—the lowest since January 2021—and the 6 month came in at 2.55 percent—the lowest since May 2021. Those are actually below the pre-pandemic averages from 2015 through 2019, when the three-month annualized rate was 2.63 percent, and the six-month rate was 2.64 percent.

The three-month annualized trimmed mean CPI came in at 1.85 percent, the lowest since January 2021. The six-month came in at 2.59 percent, which matches the low of October 2024. The three-month annualized rate is significantly below the prepandemic average of 2.14 percent, while the six-month rate is above the prepandemic average of 2.13 percent.

But the signal from these are consistent: underlying inflationary pressures are low and declining.

Real Wages Are Growing at an Extraordinary Pace

This is devastating to the media’s mantra that Americans are beset by an “affordability crisis.” We’ve long argued that the public’s sourness over prices is mostly a hangover from the high inflation of the Biden years and is likely to fade so long as inflation retreats into the mist of history. While the Trump administration can no doubt do a better job communicating its economic progress to the public, the actual decline of inflation is better than any rhetorical messaging. Just as Biden could not talk Americans out of noticing the huge rise in inflation during his presidency, the legacy media will not be able to convince Americans that inflation is still running high if it is not. Consumer prices—especially gasoline and groceries—are far too obvious for people not to notice.

The wage data we got earlier in the week completes the picture. The average weekly wage of production and nonsupervisory workers rose 0.3 percent in November compared with October, three times as fast as the rate of inflation. Compared with a year ago, wages are up 4.2 percent, which translates to a real annual wage gain of 1.5 percent. The three-month annualized nominal gain came in at 5.24 percent, indicating a real annualized gain of around 3.16 percent. That four times higher than the average prepandemic three-month gain.

In other words, the affordability crisis is resolving itself through stronger wages and lower inflation. No stimulus checks, price controls, or other government gimmicks necessary.

The Quiet Death of Tarifflation

The CPI report also made it clear that whatever price pressures might have been created by President Trump’s tariffs, they have been mild, they are over, and they did not contribute to a significant increase in broad inflation.

The prices of durable goods are up just 1.5 percent over the past year and rose just 0.031 percent from September through November. The three month annualized change comes to just 0.12 percent, a rounding error. This suggests that tariffs never were driving durable goods inflation very high and recently have hardly been contributing at all. The same analysis applies to major appliances, which are up 1.2 percent from a year ago, and core goods, which are up 1.2 percent from a year ago.

We have achieved price stability when it comes to tariffed goods categories.

‘Tis The Season to Be Shopping

We also got a retail sales report this week. It showed that purchases at department stores rose 4.9 percent in October compared with the prior month. This figure is not adjusted for inflation, but prices only rose something like 0.1 percent in October. So, American households stepped up department store shopping by a real 4.8 percent in early holiday shopping. Compared with a year ago, sales were up 4.8 percent, which translates into a real gain of over two percent.

Let’s put this as simply as we can. This is not how people behave when they feel squeezed by an “affordability crisis.”

Merry Christmas!

We typically end each weekly wrap with a reference to an important historical event. This week’s was obvious:

And it came to pass in those days, that there went out a decree from Caesar Augustus that all the world should be taxed. (And this taxing was first made when Cyrenius was governor of Syria.) And all went to be taxed, every one into his own city. And Joseph also went up from Galilee, out of the city of Nazareth, into Judaea, unto the city of David, which is called Bethlehem (because he was of the house and lineage of David), to be taxed with Mary his espoused wife, being great with child. And so it was, that, while they were there, the days were accomplished that she should be delivered. And she brought forth her firstborn son, and wrapped him in swaddling clothes, and laid him in a manger, because there was no room for them in the inn. And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, “Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of David a Saviour, which is Christ the Lord.” And this shall be a sign unto you: Ye shall find the babe wrapped in swaddling clothes, lying in a manger. And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, “Glory to God in the highest, and on earth peace, good will toward men.”

This will be the last Breitbart Business Digest of 2025. Merry Christmas to all and to all a happy new year!