In the spring of last year, former President Joe Biden was engaged in a challenging endeavor, attempting to persuade skeptical voters that the economy was in a healthy state. This situation was swiftly capitalized on by then-candidate Donald Trump, who promised to lower prices for American consumers. His strong economic message contributed to his victory over Democratic rival Kamal Harris. Fast forward to today, and it's now President Trump who finds himself in a similar position, working to convince the public that the economy is stable, even as prices surged by 3% in the year leading up to September, and consumer spending on major purchases has declined.
Betsey Stevenson, an esteemed professor of economics at the University of Michigan, suggests that Trump's efforts to frame the economy positively could be a daunting challenge, especially against the backdrop of rising costs for various goods and services. Stevenson remarked, "My personal takeaway from the experience we had in 2024 was that you can't tell people that prices aren't up when they're up." While it is true that prices for certain items, like gasoline, have decreased during Trump's presidency, the overall cost of living continues to rise significantly. For instance, grocery prices have increased by 2.7% over the past year, and electricity costs have surged more than 5%, as reported by the Bureau of Labor Statistics.
Trump's assertions regarding inflation have been labeled as misleading by Stevenson, who pointed out that consumers can observe the reality of rising prices firsthand. In a recent speech to supporters in Mount Pocono, Pennsylvania, Trump defended his administration's economic record while labeling the concept of affordability as a deceptive narrative pushed by Democrats. However, Trump's dismissal of inflation does not align with official economic data.
While inflation peaked at 9% during the summer of 2022 under the Biden administration due to pandemic-related factors, it has since stabilized, dropping to an annual rate of 3% in January, coinciding with Biden's final month in office, and maintained the same rate under Trump as of September. Despite this, a significant portion of the electorate is questioning Trump's effectiveness in addressing the ongoing challenge of rising costs. A recent Harvard CAPS/Harris poll revealed that 57% of voters believe Trump is losing the battle against inflation. Additionally, a poll conducted by the AP-NORC Center for Public Affairs Research found that 68% of respondents consider the economy to be poor or very poor.
As we approach the U.S. midterm elections, where Republicans aim to preserve their majorities in both houses of Congress, the growing dissatisfaction with Trump's economic management poses a significant threat. Notably, recent odd-year races in November showcased victories for Democrats who campaigned on the theme of affordability in major contests across New York City, Virginia, and New Jersey.
Political consultant and pollster Frank Luntz cautions that Trump risks appearing disconnected from reality if he continues to assert that affordability is a myth while many Americans are experiencing increased living costs. Luntz stated, "When you talk about affordability, it is all perception." He warned against projecting a narrative of economic prosperity when many are grappling with financial strain, likening it to the early days of the Great Depression.
Trump's administration faces significant challenges in curbing inflation and reducing prices, particularly given its embrace of economic policies like tariffs, which inherently drive prices higher. While Trump and his officials argue that tariffs are necessary to rectify past unfair global trade practices and restore domestic manufacturing, these import taxes have raised costs across various sectors, including food, clothing, and furniture. Stevenson expressed surprise at Trump's claims denying the existence of affordability issues, emphasizing that the administration is simultaneously implementing policies that restrict supply, which is a well-understood principle in economics that leads to increased prices.