Key facts
- Donald Trump claims the US has the greatest economy in history.
- Inflation is 3.4%, higher than 3.0% when Biden left office.
- Gas prices have risen approximately 50% since the war against Iran began.
- 73% of Americans view the economy as fair or poor.
- Consumer sentiment has reached its second-lowest level in 74 years.
- The average American household will spend $1,100 more this year due to Trump's tariffs.
Donald Trump's repeated assertion that the US is experiencing the "greatest economy in history" is being challenged by economic data and voter sentiment as the midterm elections approach. Critics argue that inflation, gas prices, and consumer sentiment paint a different picture.
Inflation currently stands at 3.4%, an increase from 3.0% when Joe Biden left office. Gas prices have reportedly jumped around 50% since the start of the conflict with Iran. A significant majority of Americans, 73%, believe the economy is in fair or poor condition, with 48% specifically stating it is in poor shape. The Federal Reserve's recent interest rate hike underscores concerns about persistent inflation.
Darrick Hamilton, chief economist for the AFL-CIO, described Trump's economic claims as "bluster" and "gaslighting," attributing some of the economic downturn to "Trump's unforced errors," including tariffs and actions related to the Iran conflict, which have driven up prices. Inflation is reportedly rising faster than wages, exacerbating affordability issues for Americans. A New York Times/Siena Poll indicated that 71% of voters disapprove of Trump's handling of the cost of living.
Specific price increases over the past 12 months, according to the Bureau of Labor Statistics, include fuel oil up 52%, ground beef up 7.2%, fish and seafood up 6.5%, coffee up 6.1%, sugar and sweets up 6.1%, and electricity up 3.8%. While the administration notes egg prices have fallen 23%, the average national gas price has reached $4.47 per gallon.
The economy's growth rate of 1.5% in the second quarter is contrasted with historical periods of higher GDP growth. Consumer sentiment, according to a University of Michigan poll, has fallen to its second-lowest level in 74 years, influenced by inflation, slower growth, high interest rates, and economic uncertainty.
White House spokesman Kush Desai highlighted "continued private-sector job growth" and "booming investments" as positive economic indicators. He attributed temporary disruptions to the Iran conflict but emphasized the administration's focus on its long-term economic agenda. The unemployment rate remains low at 4.1%, though job growth has averaged 43,000 per month since Trump returned to office, significantly less than the 145,000 average during Biden's last two years. US factory jobs have decreased by 35,000 since Trump's return, although 162,000 jobs were added last month.
Michael Strain, director of economic policy studies at the American Enterprise Institute, offered an optimistic view, citing a strong and resilient economy, low unemployment, and robust investment spending, while acknowledging inflation as a significant headwind. Lindsay Owens, president of the Groundwork Collaborative, expressed a more negative outlook, pointing to the Federal Reserve's rate hike and its impact on mortgage rates and housing affordability. She noted that Trump's economic approval rating is low, with only 29% of Republicans believing the economy has improved over the past year.
Owens suggested that AI investment has been a key driver of recent economic performance, fueling GDP growth and business investment. However, she also pointed to the spending power of the wealthiest 10% of Americans as a sustaining factor for the economy. She criticized Trump's perceived lack of concern for average Americans, citing his past statements downplaying the impact of the Iran war and rising gas prices.