The 2.7% Lie:
What “Low Inflation” Actually Costs You

I spent $97 on a large pizza and an appetizer last week. Not at some celebrity chef place with a two-month waitlist. A regular restaurant. The kind of place with laminated menus and a TV behind the bar playing ESPN. I sat there staring at the check doing the math in my head—three years ago, same kind of meal, same kind of place, I'm pretty sure I paid around $55. Maybe $60 on a Friday night. I don't have the old receipt. My bank account remembers, though.

That check is my version of inflation. Not the version you hear about on the news, where some anchor reads a number off a teleprompter and the lower third says "INFLATION DROPS TO 2.7%." That version sounds like good news. My version—the one that exists at the bottom of a restaurant receipt and at the register of every grocery store in this country—doesn't feel like good news at all.

The Victory Tour

In January, President Trump stood at the World Economic Forum in Davos, Switzerland and told a room full of billionaires that he had "defeated" inflation. He said that grocery prices, energy prices, airfares, mortgage rates, rent, and car payments were "all coming down, and they're coming down fast."

Since December, he's made some version of that claim almost 20 times across five economic speeches. Prices are falling. Inflation is beaten. Mission accomplished.

Here's what the federal data actually shows: when Trump took office in January 2025, year-over-year inflation was 3 percent. By December 2025, it was 2.7 percent. That's a 0.3 percentage point improvement over twelve months. It's still above the Federal Reserve's target. And the OECD projects the United States will have the worst inflation performance of any G7 country in 2026.

Douglas Holtz-Eakin, the president of the American Action Forum—a center-right think tank, not some liberal outfit—put it in plain language: "Overall, inflation at the start of 2026 is roughly the same as the start of 2025. No great progress has been made."

But the problem with the "victory" isn't even the rate. The problem is that talking about the rate at all is a con.

The Con

I need to explain something, because I think the politicians counting on you not understanding it.

The inflation rate measures how fast prices are going up. It does not measure where prices are. When the rate drops from 9 percent to 2.7 percent, that doesn't mean prices came down. It means they're going up slower than they were. That's it. Every dollar of damage that was done when the rate was high? That's permanent. It stays. Your costs are not coming down. They are going up at a slightly less horrifying speed.

Think about it like a car wreck. If I crash your car at 90 miles an hour and then a year later I crash it again at 30 miles an hour, the second crash is slower. But both cars are still wrecked. The second, slower crash doesn't fix the first one. It just adds to the damage.

That's what "2.7 percent inflation" means. It means they're still crashing your car. Just slower now.

The Receipt

Let me show you what the last six years actually did to the things you buy every week. Not abstractions. Not indices. The actual stuff you put in your cart and your gas tank and your mailbox where the rent check goes.

Grocery bills are up 49 percent since 2020. Not my estimate—the Bureau of Labor Statistics. The USDA reports that the all-food Consumer Price Index rose 23.6 percent just between 2020 and 2024, and it's kept climbing since. A family that spent $120 a week on groceries in 2020 now spends $170 for the same cart. That's an extra $2,600 a year. On food. The same food.

Gas was $2.19 a gallon nationally in 2020. Right now, as I'm writing this, it's $3.98. In California it's $5.82. Parts of Los Angeles county are over $6. San Francisco is pushing toward $9 in some neighborhoods, driven by refinery shortages and geopolitical chaos. The president says energy prices are "coming down fast." The pump says otherwise.

Restaurant menu prices are up 31 percent since February 2020, according to BLS data. Not fine dining. Regular restaurants—the ones with the plastic menus and the $14 burgers that used to be $9. Restaurant operating costs are running 30 percent above 2019 levels. Labor costs up 35 percent. Food costs up 35 percent. Every one of those increases gets passed to you on the check. That $97 pizza didn't happen by accident. It's math.

The Rent Trap

Rent is up 19 percent since the start of 2021 and hasn't come back down. Not in any meaningful way. The national median sits somewhere between $1,400 and $2,000 a month depending on whose methodology you trust. In California it's $2,895. Hawaii, $2,869. Massachusetts, $2,595. Thirteen states now have median rents over $2,000 a month.

If you make $45,000 a year before taxes—which is close to the national median for individual workers—and your rent is $1,800 a month, that's 48 percent of your gross income going to housing. Before taxes. Before groceries. Before gas. Before the $97 pizza you occasionally allow yourself because you're a human being who wants to eat a meal you didn't microwave.

The housing costs alone are eating people alive, and the inflation rate has nothing to say about it. Rent went up during the high-inflation years and stayed there. The rate dropping to 2.7 percent doesn't bring your rent back to $1,100. It means your landlord might only raise it another 3 percent this year instead of 8 percent. You're still paying $1,800. You're just grateful it's not $1,900. That's the bar now.

The Paycheck Test

Here's where it gets personal, because this is the part that determines whether you're keeping your head above water or slowly drowning.

Since January 2021, wages have gone up 21.5 percent. That sounds like a raise. Prices went up 22.7 percent over the same period. That's a pay cut. Your check got bigger and bought less. The gap is 1.2 percentage points, which doesn't sound like much until you realize it applies to everything you spend money on, every month, for five years running.

Between April 2021 and April 2023, inflation outpaced wage growth for 25 consecutive months. Two full years where your money shrank while you worked the same hours. For a lot of people, more hours. Overtime, side gigs, second jobs—and still falling behind.

As of mid-2025, 57 percent of workers had wages growing faster than inflation. Which sounds like progress until you flip it: 43 percent of American workers are still losing ground. Their pay is going up, and it still doesn't cover what things cost. The people getting hit hardest are the ones who were already making the least. Service workers. Retail. Hospitality. The people who keep the economy running and can't afford to eat at the restaurants they work in.

Economist Mark Zandi said what everybody in Washington is thinking and nobody in Washington is saying: "Inflation is especially problematic for lower and middle-income Americans, given the high inflation for many staples such as groceries, electricity, apparel, furniture, childcare, and healthcare."

Low and middle income. Staples. The stuff you can't stop buying. That's where the damage is worst, and that's exactly the population that a "victory tour" insults the most.

Worst in Class

If the domestic picture isn't bad enough, here's the international one.

The Organisation for Economic Co-operation and Development—the OECD, the organization that tracks economic performance across developed nations—projects that the United States will have the worst inflation performance among G7 countries in 2026. Not second worst. Not middle of the pack. Dead last.

We are being told that inflation has been defeated while outperforming every comparable economy on the planet in the wrong direction. Canada, Germany, France, Japan, Italy, the UK—all projected to do better on inflation than the United States this year. And the tariff situation is making it worse. Economists across the political spectrum are warning that the current trade policy is putting upward pressure on prices at exactly the moment when relief was supposed to arrive.

So the next time someone tells you inflation is beaten, ask them: beaten compared to what? Because compared to 2022, sure, the rate is lower. Compared to every other country we measure ourselves against, we're losing. And compared to what your life actually costs, the rate is irrelevant.

What the Number Hides

I keep going back to that 2.7 percent number because I think it might be the most effective lie in modern economic policy. Not because it's false—it's technically accurate. But because it's designed to make you think prices are okay when they are catastrophically not okay.

If something cost you $50 in 2020 and it costs $100 today, a 2.7 percent inflation rate means it'll cost $102.70 next year. You're still paying double. The "victory" is that they're only taking an extra $2.70 instead of an extra $9 or $10. Your wallet doesn't care about the rate. Your wallet cares about the price. And the price is still $100 for something that used to be $50.

No president has proposed bringing prices back down. Not this one, not the last one. Nobody is running on "we're going to make groceries cost what they cost in 2020 again." Because they can't. The damage is structural. The price increases are baked in. Corporations adjusted their margins. Landlords adjusted their rents. Restaurants adjusted their menus. None of them are going back.

What they can do is tell you the rate went down and hope you confuse the rate with the price. And based on the victory speeches, that's exactly the plan.

I'm Tired of Doing the Math

Here's what I know from living it, same as you.

I know that my grocery run costs more than it used to and the bags are lighter. I know that I look at gas prices before I decide whether a trip is worth it. I know that eating out has become an event instead of a Tuesday night. I know that my rent went up and my landlord didn't install a single thing to justify it. I know that my paycheck is bigger than it was five years ago and I have less in my checking account at the end of the month.

I know all of this because I live it. We all do. And then I turn on the television and I'm told it's handled. It's beaten. It's over.

It's not over. The rate is a number on a chart. The damage is in your bank account. And until someone has the honesty to say "prices aren't coming back down and here's what we're going to do about the people who can't afford them," then every victory speech about inflation is just noise designed to make you stop complaining about a problem they have no intention of fixing.