With the U.S. congressional midterm elections just around the corner, President Donald Trump has been touting the performance of the U.S. economy, claiming he has raised incomes, lowered inflation and created jobs.
Trump has repeatedly said: "We are the hottest country in the world."
While the overall U.S. economy is performing better than many expected after Trump introduced massive "Liberation Day" tariffs in 2025, there is evidence that these import taxes and the impact of the U.S.-Israeli war with Iran have driven up inflation, the negative effects of which have been borne by most American households.
The U.S. economy is also benefiting from a boom in investment in artificial intelligence, which could suffer if spending dries up.
So, how does all this feel for the average American? BBC Verify examined whether the evidence supports the president's claims.
End of content
1. The U.S. economy is growing
By recent historical standards in the United States, its overall economy is growing at a respectable rate.
The latest data shows that US gross domestic product (GDP) - which is how economists measure the size of the US economy - is currently growing at an annual rate of 2.2%.
Since the end of 2024, before Trump began his second term, the U.S. economy as a whole has grown by about 3.2%.
End of Hot Reading
This increase exceeded that of all other major economies in the Group of Seven (G7) countries during the same period.
After Trump announced a series of new tariffs on goods imported into the United States on April 2, 2025, the United States grew faster than the International Monetary Fund (IMF) predicted at the time.
The IMF lowered its forecast at the time, citing the negative impact of Trump's import tariffs on investment and consumer spending.
However, it should be noted that Trump significantly reduced the tariffs in the following months, mitigating the impact on the economy that was initially expected.
In recent years, the U.S. economy has been largely supported by U.S. technology companies’ massive investment in artificial intelligence (AI), including the construction of data centers across the country.
In August 2026, U.S. companies' spending on data center construction (excluding the information technology hardware required) reached US$5 billion (33.4 billion yuan; NT$162 billion), almost double the monthly expenditure when Trump returned to the White House.
2. Increased inflation
Many American voters want to punish Joe Biden in the 2024 presidential election, believing that he should be responsible for the pain caused by the sharp surge in prices after the epidemic.
The current inflation rate in the United States is 3.7%.
That’s still well below the recent peak of 9% in 2022 under Biden, but up from 3% when Trump took office in January 2025.
Economists estimate that U.S. inflation would have been lower without the new tariffs Trump has imposed since taking office.
The impact of the Iran war on global energy prices, including severe disruptions to oil and fuel supplies in the Middle East, has also pushed up domestic inflation in the United States.
Diesel is not only a fuel used by car owners, but is also widely used in agriculture and industry. The price of diesel per gallon in the United States reached US$6.52 in September (US$1.72 per liter; 11.49 yuan; NT$55.78), a record high.
Since Trump returned to the White House, the prices of some grocery staples, such as beef and coffee, have increased, but egg prices have declined.
Some U.S. retailers have warned that rising energy prices due to the Iran war will make food production more expensive and drive up commodity prices.
3. Household income growth is hindered
The average annual income of American households has continued to rise under Trump.
Adjusted for inflation, median income will grow 2.6% in 2025 to $87,460, a record high.
However, the Institute on Taxation and Economic Policy (ITEP) think tank estimates the combined impact on American households of the following factors:
The institute concluded that by 2026, households in the middle income quintile will earn on average about $1,700 less than before, while households in the bottom income quintile will earn on average about $750 less than before.
By comparison, the top 1% are estimated to have $12,560 more on average than before, largely due to Trump's tax cuts.
ITEP's estimate of the impact of tariffs on U.S. households at different income levels is broadly similar to estimates from the Tax Foundation think tank.
4. New job creation slows down
Trump has predicted that his tariffs will create a "flood of jobs" in the United States as manufacturing companies set up new factories in the United States to avoid having their products taxed at the border.
Since he returned to the White House, the U.S. economy has added an average of 34,000 jobs per month.
But that number is significantly lower than the 122,000 average new jobs added each month in the last year of Biden's presidency.
By September 2026, U.S. manufacturing employment will be 12.6 million, slightly lower than at the start of Trump’s second term.
However, the U.S. unemployment rate remains relatively low at 4.2%, which is about the same rate as when Trump returned to the White House.
This is partly due to Trump's immigration crackdown and deportation plans, which have reduced the size of the U.S.'s available labor force, meaning fewer jobs need to be created each month to stop unemployment from rising.
5. Rising borrowing costs
U.S. government borrowing increased during Trump's second term, driven in part by big tax cuts.
The federal government deficit - the difference between government taxes and spending - reached $2 trillion in the fiscal year ending in September 2026, equivalent to about 6% of U.S. GDP.
The U.S. deficit is expected to rise to more than 8% of GDP by 2030.
The government's high borrowing rate itself is also boosting U.S. GDP growth.
The IMF warned that the U.S. government's excessive borrowing to finance the deficit, coupled with the rapidly expanding national debt, is increasing the risk of a future financial crisis in the United States. This will hit most American families hard.
The expanding deficit is also one of the reasons why the U.S. government needs to pay higher borrowing costs in financial markets.
Since Trump returned to the White House in January 2025, the 10-year U.S. Treasury yield has risen sharply and now exceeds 5%, the highest level since the global financial crisis in 2007.
Rising borrowing costs in the U.S. government market have also put upward pressure on mortgage rates available to U.S. households.
The interest rate on a 30-year mortgage in the United States has risen to 7.4% per year, up from 6.9% when Trump returned to the White House.
This is exacerbating problems in the U.S. housing market, making it more difficult for new buyers to afford a home. Many existing property owners are simply reluctant to move because moving means giving up the cheaper mortgages they obtained at lower interest rates that cannot be transferred to the new property.
Cartography: Erwan Rivault
This article was originally written in English. We used artificial intelligence to assist in translation and was reviewed by BBC journalists before publication. Learn more about how we use artificial intelligence.
Explore more
More short films
More short films end
