‘We don’t have inflation’? Five charts show the US economic reality of Trump’s second term so far

With the midterm elections fast approaching, many Americans have the economy on their minds.

US voters are exhausted by years of higher prices. Donald Trump won the presidency in 2024 on promises to lower inflation and undo the damage he said the Biden administration had inflicted on the economy.

In Trump’s view, his plan is working. At a recent rally in Montana, Trump boasted about the current economy, framing it as a booming time for Americans. “We’re richer now,” he said. “We don’t have inflation.”

Economic data paints a different picture. Inflation, especially gas prices, have soared over the last year. The job market has been in stasis, and higher interest rates have meant it’s more expensive for Americans to borrow money for loans and mortgages.

These fluctuations have a concrete impact on the lives of Americans. A recent Harris poll for the Guardian found that a majority of Americans, including some Republicans, disagree. Nearly two-thirds said they believe the country is experiencing a recession, and many said higher prices have been a pain point. Americans are reporting having trouble saving, and a third polled said one surprise bill could sink them financially.

Here’s what the data shows us about Trump’s second term so far.

Inflation

The rate of price increases has dramatically cooled since its peak in 2022, when the pandemic’s economic stimulus packages found their way into consumer prices. Inflation peaked at 9.1%, a 40-year high, in June 2022. 

In January 2025, the month when Trump started his second term, inflation was down to 3%. By April 2025, it would be 2.3% – the lowest rate since 2021. 

A line chart US inflation rate

That’s when things start to get bumpy. After Trump placed tariffs on nearly everything that the US imports, inflation started to heat up again, climbing back up to 3% in September 2025. After many of his tariffs were paused and eventually found to be illegal, prices started going down again. In January and February 2026, inflation was back down to 2.4%. 

The Iran war, specifically its impact on oil prices, has brought inflation back up to levels not seen since 2023. In May, inflation reached 4.2% and has hovered above 3.4% since. 

It’s been nearly six years since Americans has seen inflation at a manageable 2% level. Price increases build up over time and can put a squeeze on budgets, which is why it’s such a sensitive point for voters during a crucial election.

Gas prices 

In the Guardian’s recent poll with the Harris Poll, gas prices were the most common pain point for Americans, with 83% saying they’re making a dent in their current finances. 

A line chart showing average gas prices in the US

Soon after the war in Iran began, the strait of Hormuz, a key route that a fifth of the world’s oil typically passes through, was blocked off. Its closure has pushed up prices all around the world. Though the US itself is a major oil producer, prices have still surged since the war. The average price of gas was $4.32 per gallon in mid-October, according to AAA, nearly $1.30 a gallon higher than a year ago. 

Even for an oil-producing state like Texas, a gallon of gas is $3.81 compared with $2.64 a year ago. Meanwhile, drivers in California, a state that imports much of its gas from overseas, are paying $6.21 per gallon.

Monthly job figures 

The labor market is another metric used to measure the health of the economy, and while the US job market has seen some growth since Trump took office again, figures have fluctuated over the last year. In 2025, altogether 181,000 new jobs were added to the economy, compared with 2.2m jobs in 2024. 

A bar chart showing monthly change in US jobs

Employers have been dealing with a mixed landscape for hiring: harsher immigration policies, uncertainty from tariffs and higher prices for supplies have all meant slow job growth. The unemployment rate has remained low, though, at just over 4%. Economists call this a “low-hire, low-fire” economy, in which employers are neither hiring or laying off workers.

S&P 500 

Though many Americans report struggling in today’s economy, a small handful have never been wealthier. The stock market has continued to soar since Trump took office, recovering from dips seen during his initial tariff announcement and the early days of the Iran war. 

Economists largely see AI investment as the leading factor in the stock market’s acceleration. Tech companies are spending billions of dollars investing in datacenters and for chips that are needed to power AI. 

A line chart showing the latest S&P 500 figures

While many Americans are invested in the stock market through their retirement and pension funds, this growth has really been a boon for the top 1% wealthiest Americans, who own nearly half of the stock market investments. 

Economists say higher prices paired with an exuberant stock market has led to a K-shaped economy, where the wealthier have never felt richer while everyday Americans continue to deal with tightened budgets from high prices. 

Interest rates 

Interest rates are often not as noticeable to consumers as gas or grocery prices, which they come across every day. The impact that higher interest rates have on the economy takes longer to appear and runs deep. Interest rates shape how much Americans pay to borrow money – to run their businesses, pay off car loans and buy their homes. 

For the Federal Reserve, shifting interest rates is the tool it uses to balance the economy. Raising rates can cool the economy, bringing prices down, though at the risk of hurting the job market. Lowering rates can stimulate the economy at the risk of leading to more inflation. 

A line chart showing federal interest rate

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

Uncertainty around Trump’s new tariffs would ultimately lead officials to pause the reduction, though the president was still demanding lower rates. As tariffs proved to have less of a long-term effect on prices, the Fed started lowering rates again in fall 2025. 

For months, the Fed held off on changing rates as the economic impacts of the war of Iran bore out. But in September, the Fed hiked rates for the first time since 2023, by a quarter point. The Trump-appointed Fed chair, Kevin Warsh, said that “inflation is too high and has been for too long”. 

Higher interest rates have already had an impact on mortgage rates, which had dipped down to below 6% (for a 30-year mortgage) for the first time since 2022, in February, but are now up past 7%.