State and local economic conditions and policies cause deviations in inflation from the national average.

Misleading

Facts are technically correct but framed in a way that likely leads to a wrong impression. Learn more in Methodology.

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oversight

Not applicable; statement based on the report's analysis.

Source summary

A White House research report finds that state and local economic conditions cause deviations from the national inflation average and documents that, across multiple measures and aggregations, liberal states and cities within them experienced higher inflation over the past year than conservative counterparts. The report highlights housing supply elasticity as a mechanism: where housing supply is relatively inelastic, monetary or fiscal expansions tend to raise local prices (particularly rents) more than quantities.

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Latest fact check

Regional inflation differences exist and are largely driven by housing costs and category-specific price changes rather than uniform national policies. A Chicago Fed Letter (May 2023) concludes that regional inflation gaps are mainly due to housing-price changes, with inflation rates highly correlated across regions. A St. Louis Fed analysis (Nov 2024) finds substantial shelter inflation variation across cities tied to housing markets, not local policy effects. BEA Regional Price Parities shows state price-level differences, especially housing rents, reflecting cost of living rather than policy-driven inflation dynamics. Verdict: Misleading — credible sources do not establish that state or local policies causally drive deviations from the national inflation rate.

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Timeline

Update · Dec 24, 2025, 12:23 AMMisleading
Regional inflation differences exist and are largely driven by housing costs and category-specific price changes rather than uniform national policies. A Chicago Fed Letter (May 2023) concludes that regional inflation gaps are mainly due to housing-price changes, with inflation rates highly correlated across regions. A St. Louis Fed analysis (Nov 2024) finds substantial shelter inflation variation across cities tied to housing markets, not local policy effects. BEA Regional Price Parities shows state price-level differences, especially housing rents, reflecting cost of living rather than policy-driven inflation dynamics. Verdict: Misleading — credible sources do not establish that state or local policies causally drive deviations from the national inflation rate.
Original article · Dec 23, 2025
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