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The White House on Thursday declared a decisive turn in the inflation fight, pointing to new data showing core inflation has fallen to its lowest level in nearly five years — a milestone the administration says validates President Donald Trump’s economic reset after inheriting what it calls a historic cost-of-living crisis from the Biden era. In a statement accompanying the report, White House Press Secretary Karoline Leavitt said inflation “came in far lower than market expectations,” drawing a sharp contrast with the 9 percent peak under President Joe Biden and arguing the numbers reflect sustained relief for American households. “Core inflation is at a new multi-year low, as prices for groceries, medicine, gas, airfare, car rentals, and hotels keep falling,” Leavitt said, adding that lower prices and rising paychecks are expected to continue into the new year.

According to the White House, core inflation — widely viewed by economists as the most reliable gauge because it strips out volatile food and energy costs — is now down roughly 70 percent from its Biden-era high. Officials noted that if inflation continues at the pace of the last two months, it would be running at an annualized rate of about 1.2 percent, well below the Federal Reserve’s 2 percent target. The report also highlighted broad-based price moderation across consumer staples and services, with declines in groceries, dairy, fruits and vegetables, prescription drugs, clothing, airfares, natural gas, car and truck rentals, and hotel prices. Average gas prices have fallen to multi-year lows, while rent inflation has dropped to its lowest level since October 2021, a shift the administration attributes in part to tougher enforcement against illegal immigration and reduced pressure on housing demand.

Wages, the White House says, are rising alongside easing prices. Private-sector workers are on track to see real wages increase by about $1,300 in President Trump’s first full year back in office, clawing back purchasing power lost during the inflation surge of the previous administration. Gains are strongest among blue-collar workers, with annualized real earnings up roughly $1,800 for construction workers and $1,600 for manufacturing employees. Administration officials also took aim at critics who warned Trump’s tariff policies would reignite inflation, arguing the data shows no demonstrable inflationary impact despite repeated predictions from Wall Street and academic economists.

NEC Director Kevin Hassett on the latest inflation report: "It was just an absolute blockbuster report… We looked at 61 forecasts, and this number came in better than every single one of them." 🔥 pic.twitter.com/rBJpkmjuNa

— Rapid Response 47 (@RapidResponse47) December 18, 2025

Even commentators across the media spectrum acknowledged the strength of the report. CNBC’s Steve Liesman called it “a very good number,” while CNN’s Matt Egan said it was “another step in the right direction.” Harvard economist Ken Rogoff described the reading as “a better number than anyone was expecting,” adding, “There’s no other way to spin it.” Bloomberg’s Chris Anstey noted the figure came in two-tenths below the lowest estimate in a survey of 62 economists, calling it “remarkable,” while The Washington Post’s Andrew Ackerman wrote that inflation “cooled unexpectedly,” easing pressure on household budgets.

For the White House, the message was blunt: the inflation era is over. Officials framed Thursday’s report as proof that Trump has followed through on his promise to defeat the cost-of-living crisis he inherited, laying what they called the groundwork for a strong year ahead. As the president told the nation this week, the administration insists the progress is real — and that, in his words, the best is yet to come.

From the Frontier Centre for Public Policy

By Marco Navarro-Genie

New script, same budget playbook. Nothing in the Carney budget breaks from the Trudeau years

Prime Minister Mark Carney’s first budget talks reform but delivers the same failed spending habits that defined the Trudeau years.

While speaking in the language of productivity, infrastructure and capital formation, the diction of grown-up economics, it still follows the same spending path that has driven federal budgets for years. The message sounds new, but the behaviour is unchanged.

Time will tell, to be fair, but it feels like more rhetoric, and we have seen this rhetoric lead to nothing before.

The government insists it has found a new path, one where public investment leads private growth. That sounds bold. However, it is more a rebranding than a reform. It is a shift in vocabulary, not in discipline. The government’s assumptions demand trust, not proof, and the budget offers little of the latter.

Former prime ministers Jean Chrétien and Paul Martin did not flirt with restraint; they executed it. Their budget cuts were deep, restored credibility, and revived Canada’s fiscal health when it was most needed. Ottawa shrank so the country could grow. Budget 2025 tries to invoke their spirit but not their actions. The contrast shows how far this budget falls short of real reform.

Former prime minister Stephen Harper, by contrast, treated balanced budgets as policy and principle. Even during the global financial crisis, his government used stimulus as a bridge, not a way of life. It cut taxes widely and consistently, limited public service growth and placed the long-term burden on restraint rather than rhetoric. Carney’s budget nods toward Harper’s focus on productivity and capital assets, yet it rejects the tax relief and spending controls that made his budgets coherent.

Then there is Justin Trudeau, the high tide of redistribution, vacuous identity politics and deficit-as-virtue posturing. Ottawa expanded into an ideological planner for everything, including housing, climate, childcare, inclusion portfolios and every new identity category.

The federal government’s latest budget is the first hint of retreat from that style. The identity program fireworks are dimmer, though they have not disappeared. The social policy boosterism is quieter. Perhaps fiscal gravity has begun to whisper in the prime minister’s ear.

However, one cannot confuse tone for transformation.

Spending still rises at a pace the government cannot justify. Deficits have grown. The new fiscal anchor, which measures only day-to-day spending and omits capital projects and interest costs, allows Ottawa to present a balanced budget while still adding to the deficit. The budget relies on the hopeful assumption that Ottawa’s capital spending will attract private investment on a scale economists politely describe as ambitious.

The housing file illustrates the contradiction. New funding for the construction of purpose-built rentals and a larger federal role in modular and subsidized housing builds announced in the budget is presented as a productivity measure, yet continues the Trudeau-era instinct to centralize housing policy rather than fix the levers that matter. Permitting delays, zoning rigidity, municipal approvals and labour shortages continue to slow actual construction. These barriers fall under provincial and municipal control, meaning federal spending cannot accelerate construction unless those governments change their rules. The example shows how federal spending avoids the real obstacles to growth.

Defence spending tells the same story. Budget 2025 offers incremental funding and some procurement gestures, but it avoids the core problem: Canada’s procurement system is broken. Delays stretch across decades. Projects become obsolete before contracts are signed. The system cannot buy a ship, an aircraft or an armoured vehicle without cost overruns and missed timelines. The money flows, but the forces do not get the equipment they need.

Most importantly, the structural problems remain untouched: no regulatory reform for major projects, no tax-competitiveness agenda and no strategy for shrinking a federal bureaucracy that has grown faster than the economy it governs. Ottawa presides over a low-productivity country but insists that a new accounting framework will solve what decades of overregulation and policy clutter have created. The budget avoids the hard decisions that make countries more productive.

From an Alberta vantage, the pivot is welcome but inadequate. The economy that pays for Confederation receives more rhetorical respect, yet the same regulatory thicket that blocks pipelines and mines remains intact. The government praises capital formation but still undermines the key sectors that generate it.

Budget 2025 tries to walk like Chrétien and talk like Harper while spending like Trudeau. That is not a transformation. It is a costume change. The country needed a budget that prioritized growth rooted in tangible assets and real productivity. What it got instead is a rhetorical turn without the courage to cut, streamline or reform.

Canada does not require a new budgeting vocabulary. It requires a government willing to govern in the country’s best interests.

Marco Navarro-Genie is vice-president of research at the Frontier Centre for Public Policy and co-author with Barry Cooper of Canada’s COVID: The Story of a Pandemic Moral Panic (2023).