Less than two years after voter anger over inflation ushered President Trump into the White House, those same economic anxieties threaten to cost his party its majorities in the House and Senate and derail his agenda.
The numbers behind consumers’ worries are stark. The U.S. economy grew just 1.5% in the second quarter, a marked slowdown from the 2.1% pace in the first quarter.
Inflation is still running at 3.4% year over year in July, up from 2.7% during the same period last year, according to the Bureau of Labor Statistics. July’s reading did fall from 3.5% in June, continuing a recent month-over-month decline. It is far lower than the 9.1% inflation under President Biden, but high enough to hurt Republicans’ prospects in the midterm elections.
Over the past year, hourly wage growth fell by 0.2% and average weekly earnings rose by just 0.1%, meaning wages lagged significantly behind inflation.
Consumer confidence is down significantly from the same period last year. It is now at 89.4, its lowest level in seven months, according to the Conference Board. On the positive side, consumer spending has been solid.
U.S. job growth did bounce back in August. The economy added 162,000 jobs, and the July numbers were revised upward by 21,000. July had previously been recorded as a negative. However, the unemployment rate has remained unchanged since last year.
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The numbers are weaker than in January 2025, when Mr. Trump took the oath of office and promised to “end inflation and make America affordable again.”
Inflation was running at 3% on the day Mr. Trump was sworn in, while both hourly (1%) and weekly (0.7%) wages were outpacing it.
Job growth was also remarkably strong, with 143,000 jobs added that month, and the unemployment rate was 4%, slightly lower than in July 2025.
“The economy is weak. We’re not in a recession, but you don’t see the job growth you should see, and I don’t think 2% GDP is a great economy,” said Wayne Winegarden, a senior fellow in business and economics at the Pacific Research Institute. “Affordability has worsened over the last year; we still have weak income growth and weak overall topline growth.”
Economists say a confluence of factors has contributed to the slowdown.
Mr. Trump’s tariffs on virtually all U.S. trading partners have raised costs for business and consumers alike. Although the U.S. trade deficit is down 30% this year, the monthly trade gap rose in July as the president tries to rework various levies amid legal setbacks.
The Iran war has sent oil and gasoline prices spiking after Tehran choked off the Strait of Hormuz, a critical waterway through which 20% of the world’s oil supply travels. Both added inflationary pressures just as price growth appeared to be cooling.
Layoffs tied to companies’ rapid adoption of artificial intelligence, including cuts at Meta and Microsoft, have further unsettled the labor market.
All that together has complicated the Federal Reserve’s ability to cut interest rates, leaving the central bank caught between stubborn inflation and a softening job market. Federal Reserve Chairman Kevin Warsh said Aug. 28 at the Fed’s annual Jackson Hole symposium that the central bank still has more work to do to tame inflation, signaling that an interest rate hike may be necessary.
Those numbers spell danger for Mr. Trump and congressional Republicans. Voter anger over high prices contributed to Democrats’ loss of the White House in 2024. Republicans are now staring down the same set of economic problems that helped sink the last administration.
A Gallup poll released last week found that 37% of adults approve of Mr. Trump’s handling of the economy, below his overall approval rating of 40%. The same poll found that voters’ view of Mr. Trump’s economy remained unchanged from July, even as his approval rating ticked up from 37% last month.
Other recent polls released this month, including the Financial Times/Focaldata poll and Reuters/Ipsos poll, show similar numbers.
The polling is no better for Republican lawmakers.
A Pew Research poll found that voters are now evenly split on which party they trust more on the economy, with 37% favoring Democrats and 36% favoring Republicans, eroding what has traditionally been a Republican advantage.
The Reuters/Ipsos poll found that 37% of respondents said Democrats have a better approach to the U.S. economy, compared with 36% who said Republicans do. It is the first time in nearly a decade that Democrats finished ahead of Republicans on the economy.
“The economy is the top issue in the midterms,” said Pat McFerron, a pollster with Oklahoma City-based CHS & Associates. “Not just the economy itself, but voters are concerned about job creation, affordability and inflation. It’s the critical issue nationally and locally.”
Even in deep-red Oklahoma, there appear to be warning signs for Mr. Trump and Republicans. Mr. McFerron said his own polling in the state shows Mr. Trump’s economic approval rating remains very high at 75%. However, that represents a double-digit drop from 85% just a few months ago.
“It’s not an abandonment, but it is below what it had been,” he said.
Democrats are seizing the opportunity to hammer home their message of reducing the cost of living for everyday Americans. House Minority Leader Hakeem Jeffries, New York Democrat, announced last month his party’s midterm theme, “Fighting for an Affordable America,” kicking off the 100-day countdown to the midterms.
Mr. Jeffries said his party is “making clear to the American people that we’re focused on lowering the cost of groceries and gas and housing.”
Some economists say the economy is showing signs of turning around, but the question remains whether it will be fast enough to rescue Republicans by November.
“Foreign investment is up, companies are onshoring their supply chains now, building in the U.S. That’s going to be huge, but that takes a little bit of time to get that done,” said James Mohs, an associate professor of accounting at the University of New Haven.
“I will continue to argue for patience. There are too many things that are in progress now, but nobody knows the answer to when we’ll see the benefits,” Mr. Mohs said.
He said that if Mr. Trump can resolve the war in Iran and restore full functionality to the Strait of Hormuz in the next few weeks, the economy could rebound, helping Republicans.
Republicans do have some advantages heading into November. The Senate map favors Republicans more than the House does, with Democrats defending several states in red-leaning states. Summer polling also has a mixed track record of predicting November outcomes, including 2022, when an expected “red wave” failed to materialize for the Republican Party.
Meanwhile, the economy dominates this year’s midterm campaigns.
For example, in Pennsylvania’s 7th Congressional District, incumbent Republican Rep. Ryan Mackenzie, who won the Lehigh Valley seat by fewer than 6,000 votes in 2024, has made affordability central to his reelection pitch, telling supporters he wants to focus on the Republicans’ “positive vision to bring about affordability.”
His Democratic challenger, retired firefighter Bob Brooks, has also built his campaign around the economic concerns of working-class voters, positioning himself as a Washington outsider who rails against the elite he says are raising prices.
The race has been labeled a toss-up, illustrating how the economy has become the key issue of the midterm elections, with both parties focusing on voters’ kitchen-table anxieties.
“The economy is the critical issue nationally, but it’s more than just affordability. It’s also job creation and how much money you are keeping from your paycheck, tax policy and everything else,” Mr. McFerron said.
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