Trump Delivers: Core Inflation Hits Lowest Level in Nearly Five Years

“Core inflation” is inflation with the most volatile items—food and energy—taken out. In U.S. data it normally means the Consumer Price Index (CPI) for “all items less food and energy.” It is calculated from the same price survey as headline CPI, but when the index is built, the food and energy categories are excluded so that the resulting series moves more smoothly and is used to judge the underlying trend. “Headline” inflation is the overall CPI (or PCE) that includes everything consumers buy, including food and gasoline, so it reflects what households actually pay but jumps around more month to month.

The figures in the release come from the U.S. Bureau of Labor Statistics (BLS) “Consumer Price Index – November 2025” report. That report, published on December 18, 2025, shows that over the 12 months ending in November 2025 the overall CPI (headline inflation) rose 2.7% and the “all items less food and energy” index (core CPI) rose 2.6%.

The White House “about 70%” decline is calculated by comparing today’s headline inflation to the Biden‑era peak of 9.1% year‑over‑year CPI in June 2022 and expressing the drop as a percentage of that peak:

• Biden‑era peak: 9.1% 12‑month CPI inflation in June 2022.
• Latest rate in the Trump release: 2.7% 12‑month CPI inflation in November 2025.
• Decline as a share of the peak: (9.1 − 2.7) ÷ 9.1 ≈ 0.70, or about a 70% reduction from the peak level. So the peak month/value referenced is June 2022’s 9.1% CPI inflation, and the White House is saying inflation is now about 70% lower than that high point.

The projection to a 1.2% inflation rate is based on the very low price increases over the two months spanning September to November 2025 in the CPI report:

• Because October data were missed during a shutdown, BLS reports that the CPI‑U rose 0.2% “over the 2 months from September 2025 to November 2025,” and the core index (“all items less food and energy”) also rose 0.2% over those two months.
• That implies an average monthly increase of about 0.1% (0.2% ÷ 2 months).
• If prices kept rising 0.1% every month for a year, that would be roughly 0.1% × 12 ≈ 1.2% inflation on an annual basis (more precisely, (1.001^12 − 1) ≈ 1.2%). So the “past two months” are September–November 2025, and the 1.2% figure comes from annualizing the 0.2% two‑month CPI increase reported by BLS.

Public data show the direction of real wages, but the exact $1,300 / $1,800 / $1,600 figures in the release cannot be independently reconstructed because the White House has not published its method. What can be said is:

• BLS’s November 2025 Real Earnings report shows that, from November 2024 to November 2025, inflation‑adjusted (real) average hourly and weekly earnings for all private‑sector employees rose 0.8%, and for production and nonsupervisory workers (a proxy for blue‑collar workers) rose 1.1%–1.4%.
• In dollar terms, BLS reports average weekly earnings for all employees of about $1,264 in November 2025; a 0.8% real gain over a year corresponds to roughly $10 more real pay per week, or around $500 per year—substantial but below $1,300.
• To get specific dollar increases like $1,300 overall and $1,800/$1,600 for construction and manufacturing, staff would likely: (1) take BLS average weekly earnings by sector from the Current Employment Statistics survey, (2) deflate them by CPI to get real earnings, (3) compare an end‑Biden baseline (e.g., late‑2024 average) to projected 2025 levels, and (4) annualize the difference. But without a technical note, the precise baseline months and deflator choice are unknown, and the stated dollar gains cannot be directly verified from the published BLS aggregates alone.

The White House’s assertion that tariffs have had “no demonstrable impact on inflation” is not supported by the main body of economic evidence. Key points from high‑quality studies are:

• BLS itself notes that tariffs are not directly included as a separate line in CPI, but they can “indirectly affect the prices measured,” and their effects can spill over into other goods and industries, making the impact hard to predict but not zero by construction.
• A 2025 Federal Reserve Bank of San Francisco analysis estimates that if an across‑the‑board 25% tariff were fully passed through, near‑term prices would rise about 2.2% for consumer goods and about 9.5% for investment goods, showing clear upward pressure on inflation if tariffs are large and broad.
• Academic work on the 2018 Trump‑era tariffs (before this administration) finds that tariffs were almost fully passed through into domestic import prices and raised the cost of intermediates and final goods, reducing U.S. real income. Fajgelbaum et al. (“The Return to Protectionism”) document complete pass‑through of tariffs to import prices; Amiti, Redding, and Weinstein (“The Impact of the 2018 Tariffs on Prices and Welfare”) similarly find substantial price increases and estimate a meaningful drag on real income. Taken together, these studies indicate tariffs tend to raise prices of affected goods and add (modestly but measurably) to overall inflation. There is no independent empirical study showing a zero or “no demonstrable” inflation effect from tariffs.

No public technical analysis has been released to back the specific claim that “illegals no longer drive‑up housing costs” or that the recent slowdown in rent inflation is because of changes in undocumented immigration. What can be documented is:

• BLS data show that shelter inflation has slowed: the shelter index in the CPI was up 3.0% over the 12 months ending November 2025, lower than earlier in the inflation surge, but BLS does not attribute this to immigration status; it simply measures rents and owners’ equivalent rent.
• Housing researchers find that the timing of the big run‑up in rents and home prices does not line up with the recent immigration surge. A 2024 Harvard Joint Center for Housing Studies review concludes that pandemic‑era rent and price spikes were driven mainly by native‑born household growth colliding with tight housing supply, and that immigration (documented and undocumented combined) accounted for only about a quarter of recent household growth and rose after the sharpest rent and price increases.
• A 2024 Axios analysis, summarizing academic work and Federal Reserve commentary, notes that while local immigrant inflows can add some upward pressure to rents in specific markets, the recent national surge in housing costs preceded the immigration surge, and there is little correlation across metro areas between recent immigrant inflows and home‑price growth. It also emphasizes that immigrants are a major share of construction workers, so they increase housing supply as well as demand. Overall, available data support that rent inflation has moderated but do not support a causal claim that this change is primarily or demonstrably due to fewer undocumented immigrants; other forces—interest rates, construction, and the broader post‑pandemic adjustment—are better documented drivers.