What changed
The US economy is still growing under President Donald Trump, with GDP expanding at an annualised 2.2% and standing about 3.2% above its level at the end of 2024. But inflation has climbed to 3.7%, above the 3% rate Trump inherited in January 2025, while tariffs and the war with Iran have added pressure to household costs.
Why it matters
The picture is stronger than Trump’s critics might have expected after his sweeping tariff announcement in April 2025, but it is hardly painless. Real median household income rose 2.6% in 2025 to a record $87,460. Yet diesel reached $6.52 a gallon in September, and beef and coffee became more expensive, even as egg prices fell.
That leaves households facing a familiar economic squeeze: pay is rising, but so are some of the costs that quickly reach the checkout, the farm and the factory. The tariffs were later eased, limiting their initial drag on growth, but economists estimate inflation would have been lower without them. Disrupted Middle Eastern oil and fuel supplies have added another layer of pressure.
A major support for growth is coming from US technology companies, which are pouring money into artificial-intelligence infrastructure. Data-centre construction spending reached $5bn in August 2026, almost twice its monthly rate when Trump returned to office. That boom is doing real work in the numbers, but it also makes the outlook more dependent on continued AI spending. If that investment slows, the economy could lose one of its strongest current engines.
The clearest reading is therefore mixed: Trump can point to solid growth and rising incomes, while households can point to prices that still feel heavier than they did when he took office. Neither measure tells the whole story.
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