“We don’t have inflation”? Five graphs show the American economic reality of Trump’s second term so far | 2026 US midterm elections

Inflation

The pace of price increases has slowed significantly since its peak in 2022, when pandemic economic stimulus plans were reflected in consumer prices. Inflation peaked at 9.1%, a 40-year high, in June 2022.

By January 2025, the month Trump began his second term, inflation had fallen to 3%. By April 2025, it would be 2.3%, the lowest rate since 2021.

This is when things start to get chaotic. After Trump imposed tariffs on almost everything the United States imports, inflation began to rise again, rising to 3% in September 2025. After many of his tariffs were suspended and ultimately deemed illegal, prices began to fall again. In January and February 2026, inflation returned to 2.4%.

The war in Iran, particularly its impact on oil prices, has pushed inflation to levels not seen since 2023. In May, inflation reached 4.2% and has since remained above 3.4%.

It’s been nearly six years since Americans saw inflation reach a manageable 2%. Price increases accumulate over time and can strain budgets, which is why it’s such a sore point for voters during a crucial election.

Gas prices

In the recent Guardian and Harris Poll, gas prices were the most common problem facing Americans, with 83% saying they were making a dent in their current finances.

Shortly after the start of the war in Iran, the Strait of Hormuz, a key route through which a fifth of the world’s oil typically passes, was blocked. Its closure caused prices to rise around the world. Although the United States is itself a major oil producer, prices have continued to rise since the war. The average gasoline price was $4.32 per gallon in mid-October, according to AAA, nearly $1.30 per gallon higher than a year ago.

Even for an oil-producing state like Texas, a gallon of gasoline costs $3.81, up from $2.64 a year ago. Meanwhile, drivers in California, a state that imports much of its gasoline from overseas, pay $6.21 per gallon.

Monthly employment figures

The job market is another metric used to measure the health of the economy, and although the U.S. job market has seen some growth since Trump took office, the numbers have fluctuated over the past year. In 2025, a total of 181,000 new jobs were created in the economy, compared to 2.2 million jobs in 2024.

Employers have faced a mixed hiring landscape: Tougher immigration policies, uncertainty over tariffs and higher prices for supplies have all led to slow job growth. The unemployment rate, however, remained low, at just over 4%. Economists call this a “low-hire, low-fire” economy, in which employers neither hire nor fire workers.

S&P500

Although many Americans say they are struggling in today’s economy, a small group has never been richer. The stock market has continued to soar since Trump took office, recovering from declines seen during his initial tariff announcement and the early days of the Iran war.

Economists widely view investments in AI as the main factor driving the stock market. Tech companies are spending billions of dollars investing in data centers and the chips needed to make AI work.

While many Americans invest in the stock market through their retirement and pension funds, this growth has truly been a boon for the richest 1 percent of Americans, who own nearly half of stock market investments.

Economists say rising prices coupled with an exuberant stock market have led to a K-shaped economy, in which the richest have never felt richer while ordinary Americans continue to face tight budgets due to high prices.

Interest rate

Interest rates are often not as visible to consumers as the prices of gas or groceries, which they see every day. The impact of rising interest rates on the economy takes longer to manifest and is profound. Interest rates determine how much Americans pay to borrow money – to run their businesses, pay off their car loans and buy their homes.

For the Federal Reserve, changing interest rates is the tool it uses to balance the economy. Raising rates can cool the economy and lower prices, but at the risk of harming the labor market. Lowering rates can stimulate the economy at the risk of causing more inflation.

When Trump took office in January 2025, the Fed was in the middle of a series of interest rate cuts. Officials said they were seeing inflation slowing and labor market growth slowing. Interest rates were in the range of 4.25% to 4.5%, 1% lower than a year ago.

Uncertainty surrounding Trump’s new tariffs would ultimately lead officials to suspend the cut, even though the president still demanded lower rates. As the tariffs proved to have less of a long-term effect on prices, the Fed began cutting rates again in the fall of 2025.

For months, the Fed delayed any rate changes as the economic impacts of the war in Iran took hold. But in September, the Fed raised rates for the first time since 2023, by a quarter point. Trump-appointed Fed Chairman Kevin Warsh said “inflation is too high and has been going on for too long.”

Rising interest rates have already had an impact on mortgage rates, which had fallen below 6% (for a 30-year mortgage) for the first time since 2022 in February, but are now above 7%.