The key facts
- US GDP is growing at 2.2% annually, up 3.2% since late 2024 — more than any G7 country
- Inflation rose from 3% in January 2025 to 3.7%; diesel hit a record $6.52 per gallon
- An average of 34,000 jobs are added per month versus 122,000 in Biden's final year; the budget deficit is $2 trillion (about 6% of GDP)
Growth Above Expectations
Ahead of the midterm congressional elections, Donald Trump claims he has boosted incomes, lowered inflation and created jobs, repeating: 'We have the hottest country in the world.' BBC Verify has checked these claims. The US economy is growing at 2.2% annually; since late 2024, GDP has increased by about 3.2% — more than any G7 member. Growth has been faster than IMF forecasts, which lowered expectations after the announcement of 'Liberation Day' on April 2, 2025, due to tariffs. Notably, Trump subsequently significantly softened the tariffs. Additional support comes from the AI investment boom: business spending on data center construction (excluding equipment) in August 2026 amounted to $5 billion per month — nearly double the level when Trump returned to the White House.
Inflation Has Accelerated
Inflation in the US stands at 3.7% — below the 9% peak under Biden in 2022, but above the 3% Trump inherited in January 2025. Economists estimate that without the new tariffs, inflation would have been lower; the war of the US and Israel with Iran, which disrupted Middle East oil supplies, also contributed. The price of a gallon of diesel reached a record $6.52 in September. Beef and coffee have become more expensive, eggs cheaper. Some retailers warn that rising energy prices due to the war with Iran will make food production more expensive and raise store prices.
Household Incomes and Distribution of Effects
Median income adjusted for inflation rose in 2025 by 2.6% to $87,460 — a record level. However, the ITEP think tank estimated the combined effect of Trump's tax cuts, the expiration of health insurance subsidies and higher price growth: the average fifth of households in 2026 is roughly $1,700 poorer than it could have been, the poorest fifth — $750. The wealthiest 1%, by contrast, is on average $12,560 richer — mainly due to the tax cuts. The Tax Foundation's estimates on tariffs are similar.
Employment Has Slowed
Trump predicted that tariffs would 'flood' America with jobs. On average, the economy is adding 34,000 jobs per month versus 122,000 in the final year of Biden's presidency. Manufacturing employment — 12.6 million people in September 2026 — is slightly below the start of the second term. Unemployment remains low — 4.2%, roughly at the level of the start of the term; partly because migration policy and deportations have shrunk the workforce, and fewer new jobs are needed to keep unemployment down.
A Growing Deficit and Rising Credit Costs
The federal budget deficit for the year to September 2026 amounted to $2 trillion — about 6% of GDP — and is forecast to exceed 8% by 2030. The IMF warns that excessive borrowing and rapid growth of government debt raise the risk of a future financial crisis. The yield on 10-year government bonds has exceeded 5% — the highest since the 2007 crisis. The rate on a new 30-year mortgage has risen to 7.4% annually from 6.9%, reducing housing affordability and keeping homeowners from moving because of their cheaper existing mortgages.
