Story perspectives

U.S. Affordability Crisis Persists Despite Cooling Inflation

12/17/2025

Center

Biden Tackles Inflation

The U.S. faces an ongoing affordability crisis after inflation peaked during the pandemic, with prices still affecting households.
Inflation has cooled to around 3%, but many Americans feel higher costs for essentials like groceries.
The Biden administration aims to address these issues through deregulation and supply-side reforms, though political hurdles limit fiscal action.
Public sentiment remains skeptical because the shift to a new price level is psychologically challenging for families.

Left

Powell Addresses Wage Decline

Wage growth rose 3.5 percent in November, while inflation stood at 3 percent, worsening purchasing power.
Low-income households saw only a 1.4 percent wage increase, worsening affordability.
Federal Reserve Chair Jerome Powell said a stronger job market is needed.
Job growth is declining, with three months of job losses in the past six months.
Fewer workers are quitting, reducing employers' incentive to raise wages.

History

Historical Context

The Great Inflation of the late 1970s, marked by a peak inflation rate of 13.3% in 1980, prompted Federal Reserve Chairman Paul Volcker to raise interest rates sharply, leading to unemployment exceeding 10% by 1983. This period of stagflation challenged Keynesian economics and reshaped fiscal policies, echoing today's affordability crisis as inflation and stagnant wages continue to burden American households.

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Biden Tackles Inflation

The U.S. faces an ongoing affordability crisis after inflation peaked during the pandemic, with prices still affecting households.
Inflation has cooled to around 3%, but many Americans feel higher costs for essentials like groceries.
The Biden administration aims to address these issues through deregulation and supply-side reforms, though political hurdles limit fiscal action.
Public sentiment remains skeptical because the shift to a new price level is psychologically challenging for families.

1 / 3