Ground zero: America’s heartland hit by the fallout of Trump’s bomb

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President Donald Trump has changed the geography of inflation. After years of consumer prices rising faster in big US cities, Trump’s war against Iran and global tariffs have made rural America ground zero for the fallout from the inflation bomb — and at a particularly tricky time for Republicans as they try to defend their House and Senate majorities in the midterm elections less than three weeks away.

The Bureau of Labor Statistics said that the consumer price index climbed 3.7 per cent in September from a year earlier , exceeding the median estimate of economists surveyed by Bloomberg and leading Wall Street traders to boost bets that the Federal Reserve will need to lift interest rates again before the month is over.

What’s notable about the report, besides the fact that it shows inflation is accelerating, is that it reveals consumer prices are rising faster for rural America, gaining 4 per cent over the past 12 months, than for city dwellers (up 3.6 per cent). This has been the case since right after the start of the Iran war in late February. Not only that, but the gap between rural and urban inflation this year is the widest since 2022, just after Russia’s invasion of Ukraine.

The reason why rural areas are getting hit harder is largely tied to the cost of motor vehicle fuels including diesel and gasoline (collectively up 35 per cent from a year earlier), which take up much larger shares of consumer budgets outside urban areas, according to the BLS’s Consumer Expenditure Survey. Also, rural America has a disproportionate dependence on household fuels (up 44 per cent), among them kerosene and propane, used for residential heating, hot water heaters and cooking in areas beyond the reach of traditional electric and natural gas grids, particularly parts of the Midwest, Plains and Appalachia.

Although Trump has touted what he said is a deal with Vladimir Putin to allow Russia to export diesel, the consensus is that the amount agreed upon is too little to lower prices . And not even Trump’s fellow Republicans approve of the arrangement. Rural voters are a big part of the GOP’s base. In 2024, 69 per cent of rural voters supported Trump, compared with 29 per cent who backed Democrat Kamala Harris, by far the widest margin of the three Trump general elections. Although rural communities make up just a fifth of the US population, they have an oversized role in determining the make-up of the Senate, in which each state gets two lawmakers irrespective of its size. In Kansas, for example, each voter has about 13 times as much influence in the Senate as a Californian.

The energy shock has ushered in a clear reversal of fortunes from recent years, when energy was relatively benign and rising shelter prices — a key expense for urban dwellers — drove much of the inflation. So too have Trump’s tariffs, which hit hardest in communities that rely on cars in the absence of public transportation. Vehicle purchases are 7.9 per cent of the rural budget, compared with 6.5 per cent of the city budget, according to the BLS.