Rising Prices Cloud Trump’s Economic Message as U.S. Midterm Elections Approach

WASHINGTON: With the November 3 midterm elections only days away, President Donald Trump is presenting the U.S. economy to voters as surging ahead, yet official data paint a more mixed picture, and inflation remains the dominant concern for American households.

According to the latest consumer price index released before Election Day, annual inflation stands at 3.7 percent. When President Trump returned to office in January 2025, inflation was running at about 3 percent and continued to ease until April 2025, when the administration announced broad new tariffs and prices began rising again. The war with Iran has since added further pressure, driving up gasoline costs, while grocery bills have stayed high. Although inflation remains below the peaks recorded during former President Joe Biden’s term, the earlier downward trend has reversed under the current administration, despite the President’s pledge in his inaugural address to bring costs down rapidly and his recent campaign assertions that inflation has all but disappeared.

The broader economy is neither as robust as the President has claimed nor as weak as public sentiment suggests. Gross domestic product has expanded at an average annual rate of slightly above 2 percent during Trump’s second term, a solid performance though slower than growth under his predecessor. The United States is not in recession, yet a University of Michigan survey shows consumer confidence currently lower than during the 2020 pandemic or the 2008 financial crisis.

The labour market presents a similar contrast. Unemployment remains low at 4.2 percent, but job creation has slowed considerably. Employers have added an average of nearly 39,000 jobs per month in Trump’s second term, compared with more than 121,000 per month in the year before he took office. Economists point partly to the administration’s immigration crackdown, which has reduced the number of people seeking work, while unemployment among U.S.-born workers has remained largely stable.

Borrowing has also become more expensive. Rising national debt, persistent inflation and war-related energy shocks have pushed the yield on the 10-year U.S. Treasury note above 5 percent, its highest level since 2002, making mortgages, car loans and government debt costlier to service.

Financial markets have continued to perform strongly. The S&P 500 has gained about 12 percent so far this year after rising roughly 16.4 percent last year, though the 2024 gain, before Trump’s return, was larger at 23.3 percent. Much of the momentum has come from technology stocks, while the President’s tax cuts may have supported corporate earnings; the Congressional Budget Office reports that federal revenue from business taxes fell by 16 percent last year.

The gains, however, have been unevenly shared. Federal Reserve data show that the wealth of the top 0.1 percent of U.S. households has grown by about 5.5 trillion dollars in 18 months, an average of roughly 40.8 million dollars per household. By contrast, the bottom half of households has gained around 380 billion dollars collectively, or about 5,600 dollars each on average.

As voters head to the polls, the gap between the administration’s upbeat message and the everyday cost pressures facing families is expected to weigh heavily on the outcome of the midterm contest.