This is Washington Edition, the newsletter about money, power and politics in the nation's capital. Today, economy reporter Mark Niquette looks at some the details behind recent economic data.
A slew of economic reports in the past week -- on inflation, retail sales and other indicators -- delivered some good news for President Donald Trump, who's been struggling to convince voters that his policies are ushering in a golden age for the US.
But in the details in the data are some clues to why many Americans are still anxious about high prices and pessimistic about the direction of the US economy.
Take inflation. The consumer price index report yesterday showed underlying US inflation rose in December by less than expected, suggesting that price gains were cooling heading into the new year. Real average hourly wages also climbed 1.1% from a year earlier, meaning pay gains, on average, are growing faster than prices.
On the heels of the report, Trump declared that "inflation is defeated" in an address at the Detroit Economic Club in Michigan. "Inflation has stopped. Wages are up. Prices are down," he said. "Our economy is booming like, I think you'll see soon, like never before."
But annual inflation remains elevated after falling from a four-decade high in June 2022. And while prices for gasoline and some other goods and services have dropped, they're still climbing for beef and other food items consumers put on their tables. Overall grocery prices had their biggest month-to-month spike since August 2022. Utility bills also are up.
Today brought a report showing retail sales rose in November by the most since July, suggesting it was a solid holiday shopping season for retailers. But other measures indicate that spending is being driven mainly by wealthy households while low- and middle-income consumers tighten their belts.
That's created a disconnect between the positive economic news and consumer sentiment.
In an Economist/YouGov poll conducted Jan. 9-12, only 26% of those surveyed described the economy as good or excellent, while 36% rated it as fair and 35% said it was poor. And 50% said they think it's getting worse.
Trump and other members of his administration are forecasting big gains for the economy this year as many of the president's policies, including tax cuts, kick in. But the clock is ticking on turning around sentiment with just 10 months to go before the midterm congressional elections.
Don't Miss
- Trump said he had been assured that Iran would stop killing protestersBloomberg Terminal, in a signal he could hold off on a threatened military response to the repression of widespread demonstrations in the nation.
- Denmark said a "fundamental disagreement" remained after a high-stakes meeting with the US over Greenland as several countries including Germany said they'd send military personnel to the Arctic island.
- The State Department will pause issuing immigrant visas for people from 75 countries including Somalia, Haiti and Iran, targeting specifically foreigners who they say could require public assistance while living in the US.
- The US imposed a 25% tariff on imports of certain semiconductors, a key step in an agreement blessed by Trump allowing Nvidia to ship Taiwan-made H200 artificial intelligence processors to China.
- Federal agents searched the home of a Washington Post reporter who allegedly obtained and reported on classified information from a Pentagon contractor who is currently in jail.
- A federal court said California can use its new congressional map that favors Democrats during this year's midterm election, giving the party a key win and a pathway to neutralize anticipated Republican gains from new districts in Texas.
- The US announced the "launch" of the second phase of Trump's 20-point peace plan for the Gaza Strip in an attempt to advance a fragile truce that has been challenged by Hamas militants refusing to disarm.
- Trump's move to revive the name "Department of War" could cost anywhere from a few million dollars to more than $125 million, according to an analysis by the Congressional Budget Office.
- Republican House Oversight Chair James Comer said he'll seek criminal contempt charges against Bill and Hillary Clinton for defying subpoenas to testify in his committee's investigation of sex offender Jeffrey Epstein.
- About 1.4 million fewer people have signed up for Obamacare plans so far compared to last year as a federal tax credit expires and consumers confront significantly higher premiums.
- The United Auto Workers union has thrown its support behind a Ford factory worker who was suspended for heckling Trump during a plant tour in Michigan
Watch & Listen
- Today on Bloomberg Television's Balance of Power early edition at 1 p.m., host Joe Mathieu interviewed Democratic Representative Haley Stevens of Michigan about the US intervention in Venezuela and the economic message the president delivered yesterday in Detroit.
- On the program at 5 p.m., Joe talks with Republican Senator Thom Tillis about the administration pressuring Federal Reserve Chair Jerome Powell.
- On the Big Take podcast, Sarah Holder is joined by Bloomberg immigration reporter Alicia Caldwell and the National Immigration Law Center's Efrén Olivares to discuss how a rapid evolution under Trump has reshaped ICE -- and how states are responding to unprecedented waves of federal enforcers.. Listen on iHeart, Apple Podcasts and Spotify.
Chart of the Day
For the second straight year, highly selective colleges are reporting lower Black and Hispanic enrollment than before the Supreme Court ruled against racial preferences in admissions. In a Bloomberg survey of 27 elite schools, all but two reported a smaller share of Black freshmen in fall 2025 than in fall 2023, the last class admitted before the affirmative action ban. Some 21 schools saw reduced Hispanic enrollment among first-year students over that period. At the same time, more than half the schools reported equal or higher Asian enrollment in the 2025 freshman class compared to 2023. The White House has waged an aggressive campaign to reshape US higher education, including moves to purge campus DEI initiatives and crack down on what officials say are discriminatory admissions and hiring practices.
What's Next
- Venezuelan opposition leader Maria Corina Machado is scheduled to meet with Trump tomorrow.
- Industrial production in December will be reported Friday.
- Financial markets will be closed Jan. 19 for the Martin Luther King Jr. Day federal holiday.
- The World Economic Forum annual meeting in Davos, Switzerland, is scheduled for Jan. 19-23.
- The personal consumption expenditures index for November will be reported Jan. 22.
- The University of Michigan's final reading of consumer sentiment in January will be released Jan. 23.
- The Fed's Open Market Committee meets Jan. 27-28.
Seen Elsewhere
- After dismantling USAID, the Trump administration is launching an $11 billion program to revamp overseas health assistance to enhance US influence in developing nations, Axios reports.
- The Trump administration is weighing enlisting private companies to assist with offensive cyberattacks, a dramatic expansion in the role of contractors in US cybersecurity strategy, the New York Times reports.
- Applicants for jobs as the military newspaper Stars and Stripes, which Congress has guaranteed editorial independence, are being asked how they would advance the president's policies, the Washington Post reports.