By Andrea Shalal and Steve Holland
WASHINGTON (Reuters) -Under mounting pressure from Americans worried about inflation, U.S. President Donald Trump will meet on Monday with owners, operators and suppliers of fast-food chain McDonald’s to tout his administration’s efforts to drive down living costs.
Trump has argued repeatedly that his administration’s tax cuts and steps to re-shore domestic manufacturing will help boost Americans’ real income and spur growth. But economic worries played a big role in Democratic victories in key state and local elections earlier this month, and Trump’s approval ratings have continued to drop.
On Monday, the U.S. president will appeal directly to the nation’s largest fast-food chain, whose CEO Chris Kempczinski this month warned that low-income consumers were having to absorb “some significant inflation.” Trump is due to speak to the group’s bipartisan “Impact Summit” in Washington.
Trump, who has long insisted that his sweeping tariffs are not fueling price increases, reversed course on Friday when he announced the elimination of tariffs on more than 200 imported food items, including coffee and bananas.
The president has also floated the idea of a $2,000 tariff-funded check for lower- and middle-income Americans, although such a measure would require congressional approval. He also suggested 50-year mortgages as a way to make houses more affordable, although homeowners would pay more in interest.
Trump, who made headlines when he served french fries at a Philadelphia-area McDonald’s during the 2024 election campaign, insists that inflation is far lower now than during former Democratic President Joe Biden’s term, when consumer prices spiked up to around 9%. But Americans remain skeptical.
The Economist’s longtime “Big Mac” index, which measures the cost of the famous double-decker hamburger across numerous countries, shows that a Big Mac cost on average $6.01 as of July, up from $5.69 a year ago. Three years ago, the cost was $5.15. The Economist uses a McDonald’s-supplied price for its index.
A pound of ground chuck beef cost consumers about $6.33 in September, up 13.5% from a year earlier, according to the Bureau of Labor Statistics.
The most commonly cited measure of U.S. inflation, the Consumer Price Index, was 3% higher year over year in September, its highest since January. More than half of the hundreds of line items tracked in the report had annual increases that exceeded the 3% overall inflation rate.
Prices for household staples such as coffee and beef have risen by double-digit margins in the last year, while bananas are up by about 7%, canned vegetables are nearly 5% more expensive and soft drinks cost almost 4% more.
The annual cost increase overall for food for home consumption, while seemingly more modest at 2.7% in September, is the largest in more than two years.
FIRMS SEE LOWER- AND MIDDLE-INCOME EARNERS FEELING THE PAIN
Consumers remain frustrated with high prices, a fact corporate executives frequently noted during third-quarter earnings calls. They said lower- and middle-income earners were bearing the brunt of higher costs on food, rent and other costs.
Bellwethers like Procter & Gamble, Coca-Cola and Colgate-Palmolive all cited concerns about affordability, with an increasing gap between low- and higher-income consumers.
McDonald’s, keenly aware of how resistant low-income earners are to higher prices, has been offering a $5 value meal for more than a year now.
The International Franchise Association, a trade group, praised Trump for calling attention to franchisees, which it said play a role in keeping prices affordable for average Americans.
Franchised businesses, it said, are responsible for the creation of nearly 850,000 local businesses.
(Reporting by Andrea Shalal and Steve Holland; additional reporting by David Gaffen, Waylon Cunningham and Dan Burns in New York and Tom Polansek in Chicago; editing by Ross Colvin and Richard Chang)
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