President Trump was brought to power by voters frustrated with the country’s economic performance and promised at his inauguration to “cut prices.”
But that was in January 2025, more than a year before the White House would push an agenda that would send inflation soaring again and once again test the patience — and finances — of a cost-conscious American electorate.
For Mr. Trump, the country’s political and economic strains are laid bare in a series of grim reports released over the past two weeks. Consumer prices rose last month at their fastest pace in about three years, outpacing workers’ wages, while business costs rose at a pace not seen since 2022.
Americans are accumulating more and more debt. Families save less. And a key indicator of consumer confidence fell to an all-time low this month. The concern has been reflected in recent political polls that have found broad public disapproval of Mr. Trump’s handling of the economy.
The focus is on the war with Iran, which has caused the average gallon of gasoline nationwide to rise to about $4.52, according to AAA. That’s an increase of more than 40 percent compared to last year, a boost that is reverberating across the global economy, affecting everything from the cost of workers’ daily commutes to the prices of goods at grocery stores.
Still, the president has largely dismissed these recent signals, telling reporters at one point last week: “I don’t think about the financial situation of Americans.”
Mr Trump had been asked to what extent the economy had figured into his plans to end the war and replied that disarmament was his only concern. Otherwise, the president has asserted that the U.S. economy is strong and will recover quickly after the war ends, leading to a rapid decline in gas prices in the United States.
Stephen Moore, a conservative economist who has advised Mr. Trump, said the recent turmoil was not a “surprise.” But he acknowledged that voters may not be forgiving in November’s midterm elections given the president’s pledge to lower the cost of living.
“Republicans could face a tsunami election in November if inflation remains high,” said Mr. Moore, who called gasoline prices “the most important measure that people use to determine how the economy is doing.”
The rise in fuel costs is just the latest blow to American families, who have suffered for years from rising prices, high interest rates and a weakening job market — as well as much longer-standing concerns about the affordability of housing, child care and other essentials.
Add to the growing concerns that the introduction of artificial intelligence could lead to massive job losses, and Americans have every reason to worry about their financial well-being, said David Tinsley, an economist at the Bank of America Institute.
“It’s one thing after another, and I think that’s why people feel so bad,” he said. “It’s pretty difficult to point to things that would be good for people and that would generate a lot of optimism unless you’re at the top of the income distribution.”
At the start of the year, Mr. Trump appeared poised to take the 2026 campaign and claim credit for an economy on the rise. In some of its earliest forecasts, the White House assumed that its agenda, particularly the latest round of expensive tax cuts, would set the stage for higher wages, more jobs and new investment in the coming year and deliver benefits that voters would remember once they got to the ballot box.
But then Mr. Trump began bombing Iran in February, upending the global economy by disrupting its energy supplies. Analysts are far from the boom that was once expected and have now largely revised their forecasts. They expect soaring oil prices to slow growth, worsen unemployment and drive up prices, causing the greatest harm to families who earn the least.
“These are exactly the spikes that are going to hit low-income people the hardest, at the same time that their incomes are falling the most,” said Alex Jacquez, director of policy and advocacy at the Groundwork Collaborative, a progressive group focused on cost of living issues. “I completely understand why people are so angry right now.”
Mr. Jacquez served under President Joseph R. Biden Jr., who struggled early in the 2024 election to convince Americans that the economy was good when their gas and grocery bills said otherwise. Affected by the Covid-19 pandemic downturn, voters did not accept this argument and returned Mr. Trump to office.
During the presidential campaign, Mr. Trump promised to reduce inflation and restore a sense of normality after years of economic turmoil. However, after his election, he began unleashing chaos of his own, most notably through his staggering tariffs, which caused import prices to rise. And just as those effects began to calm down, the president launched a war that drove up the cost of gasoline, the only product whose price is posted in huge quantities on every highway in America.
“They are the two most important decision points of his presidency and their impact on domestic prices is to clearly increase them,” Mr. Jacquez said.
Despite the growing challenges, the White House remained optimistic about the country’s economic development. Last Sunday, Kevin Hassett, the director of the White House National Economic Council, mused on Fox News that the country’s gross domestic product, a measure of its output, could top 6 percent this year. (Most private forecasters expect the economy to grow at less than half that rate.)
Mr. Trump and his aides have also repeatedly pointed to the stock market, which posted a series of record trading days during the war, largely due to optimism about artificial intelligence. The White House also found reason to cheer in the labor market after employers added 115,000 jobs last month, exceeding expectations.
Pierre Yared, the acting chairman of the White House Council of Economic Advisers, predicted last week that consumer prices would “come back down” after the war ends. This would ease pressure on families, he added, as wages would continue to rise “following the tailwinds of the economy”.
“Consumers continue to spend and appear to have gotten over the shock,” Yared said. “It looks to us like consumers understand that the situation is temporary.”
So far, there is little evidence that Americans’ concerns about the economy are leading them to cut back on spending. Retail sales were solid in April, data released Thursday showed, continuing a pattern of resilience that has repeatedly defied forecasters’ predictions of a slowdown.
But that strength is at least partly driven by wealthy households protected from economic headwinds by a steadily rising stock market. Low- and middle-income households are bearing the brunt of slower wage growth and rising prices. Higher tax refunds have helped many families offset higher costs, but that effect is wearing off.
“There is some buffer from increased tax returns,” said Justin Weidner, an economist at Deutsche Bank. “The consumer has some buffer in the short term, but the longer gas prices remain high, the more precarious the situation could become.”
Overall, conditions have left investors confident that the Federal Reserve will not cut interest rates this year, as Trump has vigorously sought. Even after securing a new central bank chairman – Kevin M. Warsh, who was confirmed by the Senate on Wednesday – policymakers appear inclined to wait out the current uncertainty before resuming rate cuts.
“We think there’s a narrow path to involvement, but I would say it’s very narrow,” said Josh Hirt, a senior economist at Vanguard, adding that it would “definitely depend” on ending the war with Iran quickly.
Still, the president’s advisers appear to have rejected investors’ conclusions about the Fed. In an interview on the sidelines of China trade talks, Treasury Secretary Scott Bessent told CNBC that inflation would moderate quickly, which would allow Mr. Warsh to cut interest rates soon.
“I actually think he will be in a very good position,” the minister said of Mr. Warsh, “because we could get a bunch more hot inflation numbers, but then I think we will see a significant drop in inflation.”
Michael Strain, an economist at the conservative American Enterprise Institute, said Trump’s approach to the economy has been confusing, especially given the experiences of the Biden administration.
“I was impressed, even before the Iran war, by how much President Trump is making the same mistakes as President Biden,” Mr. Strain said. “We’ve had two presidents in a row who have watched consumer prices rise and simply dismissed those price increases as temporary, transitory and in some ways not real.”
Both presidents also “chose politically to downplay the importance of price increases in voters’ lives,” Mr. Strain added.
“There have been a surprising number of own goals in the last year and a half,” he said.