In Washington, inflation has taken center stage as it affects the daily lives of most Americans. In April 2025, inflation reached 3.8%, marking a three-year high. This increase has made it challenging for many individuals to manage their budgets due to rising costs for essentials such as gas and groceries.

During a discussion on Fox Business, Larry Kudlow questioned Kevin Hassett, director of the National Economic Council, about the current inflation situation. Hassett claimed that inflation was on a significant decline, especially when excluding certain states.

Inflation in Different U.S. Regions

Hassett suggested that excluding blue states could alter the inflation picture. However, data shows inflation is high across all nine national regions defined by the Census Bureau. Gas prices have surged due to conflicts in the Middle East, driving up airfares and shipping costs, thus raising grocery prices. Clothing prices have also increased, possibly influenced by tariffs from the previous administration.

Omair Sharif, chief economist at Inflation Insights, stressed that rising gas prices affect every state. Hassett’s references to a report on higher inflation in blue states are based on outdated data before the Iran war, which began earlier in 2025. Nationwide, gas prices have climbed over 40%, diminishing previous regional inflation disparities.

Comparing Blue and Red States

The Pacific region, with many Democratic-governed states such as California, Washington, and Oregon, experienced a 3.5% inflation rate in April, below the national 3.8%. Conversely, the East South Central region, primarily Republican-governed, saw inflation at 4.5%, exceeding the national average. In the West South Central region, encompassing Texas and surrounding states, inflation stood at 3.2%, higher than pre-pandemic levels of around 1% annually.

Cost levels, such as higher gas prices in California compared to Texas, often create the impression of more inflation in blue states. However, inflation examines price increases instead of price levels. For example, gas prices have surged 36% in Texas and 26% in California from the previous year.

Core Inflation Trends

Hassett remarked on core inflation heading towards the Federal Reserve’s target. However, core inflation rose from 2.5% in January to 2.8% in April. The consumer price index (CPI) reveals core inflation lower than the headline figure of 3.8%. The Federal Reserve and economists focus more on core figures as they exclude volatile items like food and energy.

The personal consumption expenditures price index, the Fed’s preferred gauge, shows that annual core inflation grew to 3.3% in April from 3.1% in January. No significant reduction is present in core inflation trends, according to Sharif. Alternative measures, like the trimmed mean, attempt to offer additional insights. This measure has caught attention for showing a slight decline to 2.3% in April, close to the Fed’s target. Nevertheless, Federal Reserve Bank of Dallas President Lorie Logan noted potential inaccuracies in this metric, particularly during abrupt inflation changes.