People shop at a grocery store in Brooklyn on December 12, 2025 in New York City.
Spencer Platt | Getty Images News | Getty Images
Affordability has been a source of household frustration and a key focus of political discourse in recent months, as prices for everyday goods and services continue to rise.
“People are yelling about affordability,” said Martha Gimbel, executive director and co-founder of the Budget Lab at Yale University. “I think it’s very obviously become a political flash point,” she said.
The inflation rate has throttled back from its peak in 2022, when it hit a roughly 40-year high of 9.1%, as measured by the annual consumer price index. It was 2.7% in November 2025.
But the everyday prices that consumers pay remain much higher than they were before the Covid-19 pandemic. The CPI — which measures how quickly prices are rising for a basket of goods and services — has risen 26% in the past six years.
Put another way: The inflation rate since Q4 2019 has risen about twice as fast as the Federal Reserve’s optimal rate, according to Mark Zandi, chief economist at Moody’s.
But prices have risen even faster for many items that are consumer staples or impact overall quality of life, economists said.
That’s true for categories like housing, groceries, electricity, dining out, car repairs and used cars, for example, according to CPI data.
Businesses generally don’t cut prices — so prices have risen in absolute terms even as inflation has decelerated, albeit less quickly, according to economists.
“It is the case that wages have been outpacing inflation in recent years, that our living standards are just higher than they used to be,” Gimbel said. “On the other hand, it is simply the case that certain categories of spending are more emotional for people,” she said.
A University of Michigan poll published in December shows that high prices remain a pain point for consumers. About 46% blame high prices for poor personal finances — among the highest shares since the series started in the late 1970s.
Views on affordability among Republicans, Democrats
However, affordability is also somewhat influenced by the “fractured” political climate, he said.
For example, Politico’s poll shows a big gap in perceptions among Democrats and Republicans.
About 82% of people who voted for former Vice President Kamala Harris in the 2024 presidential election said the cost of living has gotten worse over the past year, according to the survey. Meanwhile, 45% of voters for President Donald Trump said the same.
Earlier this month, Trump called affordability a “hoax” during a speech in Pennsylvania.
However, he has also floated the idea of sending a $2,000 tariff “dividend” to many households, a move that economists say could stoke inflation and worsen affordability. Trump announced last week in a televised prime-time address to the nation that the government would send a $1,776 “warrior dividend” check to each U.S. service member before Christmas.
Democrats have ridden the affordability issue to victories in recent elections, including the mayoral race in New York and gubernatorial contests in New Jersey and Virginia.
Those election wins — coupled with other factors like tariffs levied this year — have brought Americans’ focus back to affordability after a period of softening inflation, Zandi said.
“The thing that brought it to the fore was the special elections that showed very clearly people are voting based on this issue,” he said. “And I think that’s what’s pushed this to the top of the political discourse.”
Why affordability will continue to be in the spotlight
Affordability may remain a top concern heading into 2026, too.
Enhanced premium subsidies for 22 million Americans enrolled in health insurance via the Affordable Care Act marketplace are poised to disappear at the end of 2025, leading insurance premiums to more than double for the average recipient.
High prices are not the only affordability driver
High prices since the Covid-19 pandemic are a byproduct of many factors.
At a high level, a mismatch between supply and demand drove prices upwards rapidly, according to economists.
The government pumped trillions of stimulus dollars into the U.S. economy to prop up household spending, and consumer demand exploded when the economy reopened broadly in early 2021; meanwhile, the Covid-19 health crisis choked supply chains, limiting supply to meet that demand. Businesses rushed to rehire workers, pushing up wage growth — and prices — especially in service-oriented sectors.
Vehicles under repair at an automotive shop in Oklahoma City, Oklahoma, on Dec. 12, 2025.
Nick Oxford/Bloomberg via Getty Images
Russia’s invasion of Ukraine in 2022 pushed up prices further for energy and food. Most recently, tariffs have put some upward pressure on prices, “rekindling” the affordability narrative, Zandi said.
But high prices are just one factor feeding into feelings about affordability, Zandi said.
Jobs, wages and the household balance sheet, including assets and debt, also feed into sentiment, he said.
The job market has broadly cooled, unemployment has increased and businesses are reticent to hire. Interest rates have fallen but remain quite high for credit cards and auto loans, while mortgage rates remain above 6%, Zandi said.
I think it’s very obviously become a political flash point.
Martha Gimbel
executive director and co-founder of the Budget Lab at Yale University
While stock prices have soared, those riches have flowed largely to high-income households, which own a disproportionate share of such assets.
Wage growth has also declined more rapidly for lower-wage workers than for those earning higher incomes, according to data compiled by the Federal Reserve Bank of Atlanta.
“Not all Americans are feeling the affordability squeeze,” Zandi wrote in November. “The finances of the well-to-do are arguably as good as they have ever been.”
Households who feel that squeeze shouldn’t necessarily despair, however, Gimbel said.
“We can solve these problems,” she said. “But it takes time, and people need to feel like you’re listening to them and taking them seriously.”
