A new analysis from the White House Council of Economic Advisers reveals that inflation has been significantly lower in states led by conservative governments compared to those led by liberal governments over the past year. The most notable discrepancies have occurred in energy and transportation costs.
Reviewed by FOX Business, the analysis uses year-over-year Consumer Price Index data from the Bureau of Labor Statistics through November 2025.
The analysis found that inflation averaged 2.5% in states led by conservative governors, compared with 3% in states led by liberal governors.
Because the Bureau of Labor Statistics does not publish official state-level CPI data, the Council of Economic Advisers relied on regional inflation figures and adjusted them based on state population.
The disparity was more pronounced at the metropolitan level.
Metro areas in conservative-led states recorded 1.9% year-over-year inflation, while metro areas in liberal-led states posted 3%, a difference most evident in day-to-day expenses such as commuting and utility bills.
Energy costs accounted for much of the gap. In major liberal-run metro areas, including Baltimore, Chicago, Los Angeles, and New York, energy prices increased at a faster pace than in cities located in conservative-led states. Combined energy and transportation costs explained a significant share of the inflation difference between metro areas.
Rising costs for electricity, gasoline, and commuting tend to be felt quickly by households, even when overall price increases are relatively modest.
Advertisement
Housing inflation remained elevated nationwide, though prices continued to rise slightly faster in liberal-led states than in conservative-led states.
White House economic director Kevin Hassett said Sunday that the Trump administration is prioritizing efforts to improve housing affordability. “Everybody in the whole Cabinet is working on trying to get housing to be more affordable,” Hassett told Fox News Sunday.
He mentioned that a comprehensive proposal designed to alleviate the pressures on homebuyers is currently being developed, with details anticipated early in the new year.
Earlier this month, President Donald Trump and members of the White House boasted about inflation coming in at 2.7 percent for November, which was lower than expected. Members of the president’s administration are arguing that the U.S. economy is set to take off in 2026.
Paul Ashworth, Oxford Economics’ chief North America economist, was especially shocked by the numbers, particularly the small rise in housing costs.
“It’s possible that this does reflect a genuine drop off in inflationary pressures, but such a sudden stop, particularly in the more-persistent services components like rent of shelter is very unusual, at least outside of a recession,” he wrote in a note.
Treasury Secretary Scott Bessent echoed a similar tune, saying they believe “2026 will be a great year for growth, inflation, and the American people.”
“I think 2026 will be a great year for growth, inflation and the American people that the president work for everyday. It is because the affordability crisis under the Biden Administration, there are two parts here. There is price level and then there is the inflation rate. And the price level just got out of control during the disastrous four years of Biden,” Bessent said during an interview with Fox News host Laura Ingraham.
“So stated consumer price index was up about 21-22 percent, the Wall Street firm has something to call the common man index which is what do working-class families by. Groceries, rent, insurance, used cars. That was up about 35%. So that big price level. Then there is the rate of change and as we saw this week, President Trump, the whole administration had been working hard to bring down the inflation level on a trailing three-month basis, inflation is now 2.2%,” he added.
“In general, we have seen the growth of jobs this year have gone to native-born Americans. Not illegals, not others,” Bessent said.
