A report by the Government Accountability Office strongly disputes claims by the Biden administration and Democrats that rising consumer prices in 2024 were the result of corporate greed known as “shrinkflation.”
Early last year, President Biden and Democrats made “shrinkflation” their scapegoat for soaring prices and eye-popping food costs in an effort to soothe an angry public in an election year. The term refers to a reduction in the size of a product, such as a candy bar, cereal box or cookie package, while prices rise or hold steady.
It became the main talking point for Democrats and Mr. Biden as they sought to cast corporations as the villains behind the price increases. Their claim was aimed, in part, at deflecting the argument by some economists that high government spending was to blame for high inflation.
However, the GAO, an independent nonpartisan government organization, said in a report late last month that claims of shrinkflation during the Biden years were simply untrue.
The GAO concluded that shrinkflation accounted for just 0.06 of a percentage point of the 34.5% increase in prices between 2019 and 2024, with an annual average effect of 0.01 of a percentage point.
“Shrinkflation had a minimal impact on overall inflation from 2019 to 2024,” the GAO wrote in its report. “This is because items that were downsized made up a small percentage of goods and services tracked in inflation measures.”
The GAO report, which was based on an analysis of Bureau of Labor Statistics data and Consumer Price Index reports, also concluded that shrinkflation had a minimal impact on specific product categories.
Among seven product categories that accounted for thousands of household items, the GAO found that less than 5% of the items in each category were downsized by producers. For example, in the cereal category, 1.1% of items were downsized, representing 8.6% of sales. In the toothpaste category, 0.4% of items were reduced, accounting for 2.3% in sales.
“Downsized products were a small share of all products tracked in inflation,” the GAO wrote.
Multiple former Biden economic officials did not respond to requests for comment.
Combating shrinkflation became the cornerstone of Mr. Biden’s last year in office. Overall inflation was 21.2% during Mr. Biden’s four years in office, according to Bureau of Labor Statistics data released in January.
Ahead of the 2024 Super Bowl, Mr. Biden released a video blaming shrinkflation for why it cost so much more to buy sodas, chips and other snacks for Super Bowl parties. He also hammered the issue in his final State of the Union address, urging Congress to pass a bill authorizing the Federal Trade Commission to crack down on reducing the size of packages.
“Too many corporations raise their prices to pad their profits, charging you more and more for less and less,” Mr. Biden said. “That’s why we’re cracking down on corporations that engage in price gouging or deceptive pricing from food to health care to housing.”
When Vice President Kamala Harris replaced Mr. Biden atop the Democratic ticket, she campaigned on empowering the FTC to go after shrinkflation.
In October 2024, Sen. Elizabeth Warren of Massachusetts and Rep. Madeleine Dean of Pennsylvania, both Democrats, wrote to the CEOs of PepsiCo, Coca-Cola and General Mills to accuse them of shrinkflation. They accused the companies of reducing their package size, while increasing prices. The companies have strongly denied the claim.
Representatives for Ms. Dean and Ms. Warren did not respond to a request for comment on the GAO study.
• Jeff Mordock can be reached at jmordock@washingtontimes.com.