Ahead of the critical 2026 midterm congressional elections, former and current President Donald Trump has been actively touting his administration’s economic track record, asserting that his policies have lifted household incomes, tamed runaway inflation, and fueled unprecedented job creation across the United States. Repeating his signature optimistic framing, Trump has repeatedly declared that the U.S. “has the hottest economy anywhere in the world.” But a new fact-checking investigation by BBC Verify has unpacked the gap between the president’s rhetoric and on-the-ground economic data, revealing a complex picture of strong headline growth paired with uneven burdens falling on working- and middle-class American households.
To start with the headline metrics the president often cites, the U.S. economy has indeed outperformed many initial projections following Trump’s second-term inauguration, even after his sweeping 2025 “Liberation Day” tariff package. By recent U.S. historical standards, GDP growth is holding at a respectable annualized rate of 2.2%, with total expansion hitting 3.2% since the end of 2024 — just before Trump retook the Oval Office. This outpaces every other G7 advanced economy over the same period, and beats the gloomy downgraded growth forecasts the International Monetary Fund released immediately after Trump’s April 2025 tariff announcement. Crucially, however, the president significantly rolled back those tariffs in the months after their rollout, softening the economic damage analysts had initially projected.
Another major tailwind supporting U.S. growth right now is an unprecedented boom in corporate artificial intelligence investment, particularly in the construction of new data centers across the country. By August 2026, U.S. businesses were spending $5 billion per month on data center construction alone (excluding the IT hardware that goes inside those facilities) — nearly double the monthly rate when Trump returned to office. Yet analysts warn this growth driver is fragile: if AI investment cools abruptly, the broader economy could face a sharp slowdown.
On inflation, the issue that dominated voter anger in the 2024 presidential election, the picture is far more mixed than Trump’s claims suggest. Voters ousted Joe Biden in 2024 largely over the 9% peak inflation hit in 2022, and today’s 3.7% national inflation rate is a steep drop from that Biden-era peak. But it remains noticeably higher than the 3% rate Trump inherited when he took office in January 2025. Economists broadly agree that inflation would be lower today if not for two key developments of Trump’s second term: his new import tariffs, and the spillover effects of the US-Israel-Iran war, which has disrupted global energy supplies and pushed up fuel and transportation costs across the U.S.
The real-world impact of these price hikes is already visible to consumers: a gallon of diesel, a critical input for agriculture, manufacturing, and long-haul shipping, hit an all-time record high of $6.52 in September 2026. Core grocery staples including beef and coffee have also risen in price since Trump’s return to office, though egg costs have fallen from their pandemic-era peaks. Major U.S. retailers have already issued warnings that energy-driven cost increases from Middle East supply disruptions will push food prices even higher in coming months.
On household incomes, another core claim from Trump, data shows median inflation-adjusted income rose 2.6% in 2025 to $87,460 — an all-time high on paper. But analysis from nonpartisan think tank the Institute on Taxation and Economic Policy (ITEP) tells a far more unequal story. When combining the impact of Trump’s signature tax cuts, the expiration of expanded Affordable Care Act subsidies that previously held down health insurance costs for millions of Americans, and inflation-driven price hikes tied to tariffs and the Iran war, ITEP found most American households are actually worse off financially. The middle fifth of income earners face an average net loss of $1,700 in 2026 compared to a scenario without Trump’s second-term policy changes, while the poorest fifth of households see an average loss of $750. By contrast, the wealthiest 1% of Americans gain an average of $12,560, a windfall driven almost entirely by Trump’s tax cuts. ITEP’s findings on the unequal impact of tariffs align closely with separate analysis from another nonpartisan group, the Tax Foundation.
On job creation, Trump has predicted his tariffs would “flood America with jobs” as manufacturers move production back to U.S. soil to avoid border taxes. Since his inauguration, the economy has added an average of 34,000 jobs per month — a steep drop from the 122,000 monthly jobs added in the final year of Joe Biden’s presidency. The total number of Americans employed in manufacturing, a key sector Trump has prioritized, stands at 12.6 million as of September 2026, which is actually slightly lower than when his second term began. The U.S. unemployment rate does remain low at 4.2%, roughly unchanged from when Trump took office, but that figure is partially propped up by the administration’s aggressive immigration crackdown and deportation program, which has shrunk the total available domestic workforce. A smaller workforce means far fewer new jobs need to be created each month to keep unemployment steady.
Beyond these core metrics, Trump’s economic policies have driven a sharp increase in federal government borrowing, driven primarily by his large-scale tax cuts. The federal deficit — the gap between government tax revenue and annual spending — hit $2 trillion in the 12 months ending September 2026, equal to roughly 6% of total U.S. GDP. Projections show the deficit could grow to more than 8% of GDP by 2030. This elevated deficit spending is currently propping up GDP growth, but the IMF has warned that excessive borrowing and rapidly growing national debt raise the risk of a future U.S. financial crisis that would inflict severe harm on most households.
Growing deficits have also pushed up borrowing costs for the U.S. government, which in turn lift interest rates for consumers. Yields on 10-year U.S. Treasury bonds have risen sharply since January 2025 and now top 5%, the highest level since the 2007 global financial crisis. That increase has pushed the average interest rate on a new 30-year mortgage up to 7.4%, up from 6.9% when Trump took office, worsening affordability in the already strained U.S. housing market. Many existing homeowners are now trapped in their current properties, as selling would force them to give up their low-rate mortgages that cannot be transferred to a new home purchase.
As midterm campaigning intensifies, the gap between Trump’s economic rhetoric and the lived experience of most American households is set to become a core defining issue for voters heading to the polls.
