Treasury Secretary Joe LaVogna discusses a report on why blue states have higher inflation rates on the Evening Edit.
First appearance on Fox: Over the past year, conservative-led states had lower inflation rates than liberal-led states, with the largest differences in energy and transportation costs, according to an analysis by the White House Council of Economic Advisers.
The analysis, reviewed by FOX Business, was based on year-over-year consumer price index data from the Bureau of Labor Statistics through November 2025 and found that inflation averaged 2.5% in conservative-led states, compared to 3% in liberal-led states.
In the absence of an official state-level CPI, CEA used regional inflation data and adjusted it based on each state’s population.
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The inflation gap is widening at the city level, with metropolitan areas in conservative states experiencing year-on-year inflation of 1.9%, compared to 3% in metropolitan areas in liberal states.
Energy inflation is one of the biggest contributors to the overall rise in inflation in Liberal-run cities. Major metropolitan areas such as Baltimore, Chicago, Los Angeles, and New York saw energy prices rise much faster than cities in more conservative states.
Together, energy and transportation costs account for much of the inflation gap between metropolitan areas.
When necessities like electricity, gas, and commuting go up in price, households feel the impact immediately, even if the price increases only slightly.
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meanwhile, housing Inflation remains high nationwide. Still, prices are rising slightly faster in liberal-led states than in conservative-led states.
Kevin Hassett, White House Economic Director said on sunday The Trump administration is said to be making an all-out effort to tackle the housing affordability crisis.
“Everyone in my cabinet is committed to making housing more affordable,” Hassett told “Fox News Sunday.”
According to CEA data, housing prices remain high nationwide. (Matthew Bush/Bloomberg/Getty Images)
He said his administration was preparing sweeping proposals aimed at easing the burden on homebuyers, with details expected to be announced early in the new year.
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The CEA findings come as inflation remains a top concern for voters and state and federal leaders debate energy, housing and transportation policies that directly impact the cost of living.
