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 House and Senate majorities 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 during the first three months of the year.
Inflation is still running at a too-high 3.4% in July, up from 2.7% during the same period last year, according to the Bureau of Labor Statistics. It’s far lower than the 9.1% inflation under President Biden, but high enough to hurt Republicans’ prospects in the midterms.
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’s 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 new jobs and the July numbers were revised to show an increase of 21,000 new jobs. July had previously been recorded as a negative. However, the unemployment rate remains unchanged since last year.
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The numbers are weaker when compared to 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, when both hourly (1%) and weekly (0.7%) wages were outstripping inflation.
Job growth was also remarkably strong, with 143,000 jobs added that month, and unemployment was 4%, slightly lower than July 2026.
“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. While 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 war against Iran 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 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 of 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 Friday that the central bank still has to do more work to tame inflation, signaling that an interest rate hike is looming.
Those numbers spell danger for Mr. Trump and Republicans. Voter anger over high prices contributed to Democrats losing the White House in 2024. In November’s midterm elections, Republicans are now staring down the same set of economic problems that helped to sink the last administration.
A Gallup poll released this 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 isn’t any better for GOP 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 compared to 36% favoring Republicans, eroding what’s traditionally a GOP advantage.
The Reuters/Ipsos poll revealed that 37% of respondents said Democrats have a better approach to the U.S. economy compared with 36% who picked Republicans. 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, an Oklahoma City-based pollster. “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 on the opportunity to hammer home their message of reducing the living costs for everyday Americans. House Minority Leader Hakeem Jeffries, New York Democrat, last month unveiled his party’s midterm theme of “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 there are signs that the economy is on the verge of turning around, but the question remains if it will be fast enough to rescue Republicans in a few months.
“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, a professor emeritus of economics at the University of New Hampshire.
“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 if Mr. Trump can resolve the Iran war and get the Strait of Hormuz fully functional in the next few weeks, the economy could rebound to help Republicans.
Republicans do have some advantages heading into November. The Senate map favors the GOP 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 GOP.
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 4,000 votes in 2024, has made affordability central to his reelection pitch, telling supporters he wants to focus on the GOP’s “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 railing against the elite whom 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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