Full Breakdown
Trump’s Economy in Crisis: Inflation, Job Losses, and Midterm Stakes
8/13/2026, 9:01:06 PM
Core Event
President Donald Trump faces mounting economic criticism as inflation, gasoline prices, and job losses persist during his second term. An AP-NORC poll released in late July found only 32 % of U.S. adults approved of Trump’s handling of the economy, while 69 % described the overall economy as “poor.” The poll highlighted groceries and gas as major sources of voter stress.
Background & Context
Since taking office in January 2025, the administration has pursued aggressive tariff policies and a renewed war with Iran. The conflict has kept the Strait of Hormuz partially closed, pushing national gasoline prices above $4 per gallon (AAA). The Bureau of Labor Statistics reported a 3.4 % annual inflation rate in July, after a brief dip in June.
Data & Statistics
- Job losses: 23 000 jobs were lost in July; the May-June revision cut 103 000 jobs from earlier estimates.
- Employment-population ratio: Fell from 60.1 % in January 2025 to 58.9 % in the latest household survey, the lowest level since September 2021.
- Real disposable income: Flat since February 2025, a pattern historically associated with recessions.
- Personal savings rate: Declined to 2.7 %, the lowest since June 2022.
- S&P 500: Up 5.6 % since July 29, driven largely by the AI-related rally.
Official Statements & Responses
- Treasury Secretary Scott Bessent dismissed the “K-shaped economy” narrative, labeling the situation a “C economy” in which lower-wage earners are “finally clawing their way back.”
- Kevin Hassett, director of the National Economic Council, argued that the July job losses reflect temporary factors such as the World Cup and teachers’ July vacations, and maintained that the overall economy is “really, really booming.”
- Trump contended that voters are “angry at Republicans,” not at him, and described his approach to the Iran conflict as “semi-negotiating.”
Criticism & Opposition
- Alex Jacquez, senior vice president of policy and advocacy at Groundwork Collaborative, warned that “prices started climbing again in July, and Trump’s catastrophic mismanagement of our economy means more spikes in the months ahead.”
- Ranking Member Brendan Boyle (D-PA) accused the president of ignoring Americans’ financial situation, stating, “Month after month, Donald Trump continues to prove that he doesn’t ‘think about Americans’ financial situation.’”
- Joe Gruters, RNC chair, shifted blame to the previous administration, claiming “this is Biden’s prices that we’re still dealing with, and we’re still getting under control.”
Conflicting Reports & Gaps
- Inflation figures differ across outlets: the July CPI increase is reported as 0.1 % seasonally adjusted and as a 3.4 % annual rate. Both numbers refer to the same data set.
- While the administration cites a “booming” economy, real disposable income data shows no growth since February 2025, indicating a gap between official rhetoric and household-level trends.
What’s Next
- The November 3 midterm elections are scheduled, with Democrats holding a generic-ballot lead of 6.7 points.
- Economic messaging will remain a central battleground as both parties seek to sway voters concerned about inflation, gas prices, and job security.
