Are most Americans better off financially than they were one year ago? Most likely no. Mark Zandi, chief economist at Moody’s Analytics, says nearly a third of the U.S. economy is either in a recession or teetering on the edge. Some of the warning signs include layoffs are up 140% over last year; over half of U.S. industries cut jobs in July; construction of new homes is slowing; and home prices are falling or stagnating, he points out.
Arguably most significant to average Americans is the rising price of groceries and utilities. The Consumer Price Index shows the price of food has risen 3% in the last 12 months—groceries have risen 2.4% while dining out is 3.8% costlier than it was 12 months ago. At 3%, the cost of food is rising faster than the overall inflation rate as measured by the Consumer Price Index, at 2.7%.
Almost 90% of American adults say they’re stressed about the cost of groceries, a new poll from the Associated Press-NORC Center for Public Affairs Research shows, as the price of food rises and items like poultry, ground beef and eggs see the biggest cost jumps.
A recent Consumer Price Index report also found electricity prices at double the rate of inflation, increasing 5.5% over the past year, with natural gas prices up 13.8%. Nearly 60 utility companies are set to increase electricity rates this year by more than $38 billion, affecting more than 57 million Americans, according to analysis from the Center for American Progress.
As for jobs, the B.L.S. shows the economy added only 22,000 jobs in August. Compare that figure to the normal monthly gain of 180,000 to 200,000 jobs. Basically, companies are not hiring.
Trump tariffs will make the situation worse
Economists believe the jobs and inflation situation could get even worse as soon as President Donald Trump’s tariffs set in. Recent decisions regarding tariffs have created uncertainty for employers, making it challenging to forecast future trends. As a result, many companies are postponing hiring, and those that have delayed price increases may not be able to continue doing so.
Brian Bethune, an economist at Boston College, said that overall U.S. tariffs — calculated as the amount of duties paid by U.S. companies divided by overall imports — has reached 10%, the highest in decades, and will likely keep rising for months.
The widespread economic uncertainty, weak labor and rising inflation are on Trump because of his impulsive approach to the economy or his complete noncommittal to do anything in some areas like dealing with high prices of groceries.
Trump’s energy policies are making utilities more expensive
On energy, Rob Gramlich, president of Grid Strategies, a D.C. based energy consultancy firm, said the Trump administration has enacted policies to curtail new clean energy projects and instead foster greater reliance on fossil fuels. Approving and permitting new clean energy projects has become increasingly difficult, taking away a valuable asset from energy providers at a critical time, he said.
Over the past decade, the nation’s energy mix has increasingly grown to favor natural gas and renewables, like wind, solar and hydropower, that have become much cheaper to produce. “If things keep going like this, [utility bills] are gonna be higher next year,” Gramlich said.
Furthermore, the passage of Trump’s signature legislation, One Big Beautiful Bill Act, is expected to make energy more expensive, impact jobs, and make it more difficult to meet rising energy demand, according to analysis by Energy Innovation, a nonpartisan energy and climate policy think tank.
Healthcare costs are on the rise
It’s not just grocery prices and energy prices that have risen. Healthcare expenses, including medical care, insurance premiums, prescription medications and out-of-pocket costs are all rising and outpacing wage growth. According to public health experts, the One Big Beautiful Bill Act is expected to result in the removal of millions of individuals from Medicaid coverage and consequently increase health insurance premiums for the majority of consumers.
Capitalizing on the dismal inflation and jobs statistics
Democrats were pummeled in the last election largely for poorly overseeing a period of soaring inflation. Trump capitalized on this in the last election vowing to improve the economy and high grocery prices and utilities.
Clearly Trump made the economy worse, or more bluntly put by the Democratic National Committee, “Trump’s economy is in the gutter.”
Democrats are poised to return the favor in the upcoming midterm and can repeat over and over a message that Trump and Republicans not only failed to deliver on improving the economy as they promised, but they have made things worst.
However, it’s not enough for Democrats to hammer the point that Trump and Republicans failed, but they must offer a blueprint how they will make the economy better, and not resort to abstractions or avoidance, which is what they did in the last election that voters found unacceptable and simply rhetoric.
Democrats also have a tendency to oversell their own mediocre accomplishments. The rising costs of food, energy, and healthcare are complex problems resulting from years of neglect. In fairness to Trump, certainly he’s accelerated the problems, but Democrats while in power are also culpable for not doing enough.
It’s frustrating, even infuriating that Americans are not getting the proper political representation they hope for as interest groups get what they want enjoying record breaking profits at the expense of struggling Americans.
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