WASHINGTON, D.C. — Inflation did not hit every part of the country evenly in 2025, and a new White House–backed economic analysis makes one conclusion hard to ignore: states and metro areas governed by liberal political coalitions consistently experienced higher price growth than their conservative counterparts.
The report, released December 23 by the Council of Economic Advisers, examines inflation through multiple lenses — statewide averages, metro-area data, and different measures of political control — and finds the same pattern repeating across the board. Liberal states and the cities within them saw faster year-over-year inflation than conservative states, even after adjusting for population and spending categories.
At the national level, population-weighted inflation averaged 2.7 percent as of November. Conservative states came in lower, at 2.5 percent, while liberal states ran hotter at 3.0 percent. The gap widened further in key household cost categories, particularly housing, energy, and transportation — areas that dominate monthly budgets for working families.
Housing costs stood out as a major driver. The report points to supply constraints in many liberal jurisdictions, where zoning rules, land-use restrictions, and permitting delays make housing supply less responsive to demand. In those environments, economic stimulus or population growth tends to show up not as new construction, but as higher rents and home prices. Conservative states, with more elastic housing supply, saw smaller rent increases under similar conditions.
The pattern held when analysts zoomed in on metropolitan areas. Metro regions located in conservative states posted significantly lower inflation than metros in liberal states, even when comparing similar categories like food, housing, and transportation. Some large liberal metros recorded inflation rates well above the national average, reinforcing the idea that local policy environments can amplify cost pressures.
To test whether party labels alone were skewing the results, the analysis ran parallel comparisons based on gubernatorial control, legislative control, and unified state government. In each case, states under liberal control showed higher inflation than those governed by conservatives. States with divided government generally fell in between, suggesting policy choices — not geography alone — play a measurable role in price outcomes.
The report also highlights a structural limitation: there is no official state-level Consumer Price Index. Instead, researchers used regional CPI data, population weighting, and metro-area inflation figures from the Bureau of Labor Statistics to approximate state-level effects. Even with those constraints, the inflation gap remained consistent across methodologies.
While the White House analysis avoids overt political prescriptions, its implications are difficult to miss. Local decisions on housing supply, energy policy, and regulatory flexibility can materially affect what residents pay for rent, fuel, and daily necessities. In 2025, those decisions appear to have made life more expensive in liberal states — and cheaper, by comparison, in conservative ones .
As inflation remains a top concern for voters heading into the next election cycle, the report adds fuel to an already heated debate: when prices rise faster in some states than others, policy — not just macroeconomics — may be a significant part of the explanation.
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