Trump Faces Economic Pressure as Inflation and Gas Prices Rise

Rising consumer prices, expensive gasoline and sluggish job growth are putting pressure on the US economy under President Donald Trump as the country approaches its midterm elections. Economic data published in an analysis by The Guardian on October 26, 2026, shows that inflation has accelerated again, borrowing remains costly, and many households are struggling to manage their finances despite gains in the stock market.

Trump returned to the White House in January 2025 promising to reduce inflation and reverse what he described as economic damage caused by the Biden administration. However, inflation, which fell to 2.3% in April 2025, climbed again amid tariffs and rising oil prices linked to the war in Iran.

A recent poll conducted by Harris Poll for The Guardian found that nearly two-thirds of Americans believe the country is experiencing a recession. Gasoline prices were the most frequently cited financial concern, with 83% of respondents saying fuel costs were affecting their finances. About one-third said an unexpected bill could leave them in financial difficulty.

At a recent rally in Montana, Trump presented a more positive assessment of the economy.

"We’re richer now," Trump said. "We don’t have inflation."

However, the economic indicators examined by The Guardian show that households continue to face elevated prices, while employment growth has weakened compared with the previous year.

Inflation reached a 40-year high of 9.1% in June 2022 before declining to 3% in January 2025, when Trump began his second term. After falling to 2.3% in April 2025, the rate rose to 3% in September as the administration imposed tariffs on a broad range of imports.

Inflation subsequently declined to 2.4% in January and February 2026 after several tariffs were paused and later ruled illegal. The war in Iran and its impact on oil prices then pushed inflation to 4.2% in May 2026. According to The Guardian's analysis, the rate has remained above 3.4% since then.

Higher fuel costs have added to household expenses. The American Automobile Association reported that the average US gasoline price reached $4.32 per gallon in mid-October, nearly $1.30 above the level a year earlier.

Prices also varied considerably by state. In Texas, gasoline averaged $3.81 per gallon, compared with $2.64 a year earlier. California drivers faced an average of $6.21 per gallon, according to the figures cited by The Guardian.

The war in Iran disrupted the Strait of Hormuz, a major shipping route that typically carries about one-fifth of the world's oil. The disruption contributed to higher global energy prices, affecting US motorists despite the country's substantial domestic oil production.

The labor market has also shown limited momentum. The US economy added 181,000 jobs in 2025, compared with 2.2 million in 2024. According to The Guardian, stricter immigration policies, uncertainty surrounding tariffs and higher supply costs have contributed to slower hiring.

Unemployment has remained slightly above 4%, while employers have generally avoided both substantial hiring and widespread layoffs. Economists describe this pattern as a "low-hire, low-fire" economy.

Meanwhile, the US stock market has continued to rise since Trump took office, recovering from declines following his initial tariff announcements and the early stages of the war in Iran. Economists cited by The Guardian identify investment in artificial intelligence as a leading driver of the market's gains.

Technology companies have committed billions of dollars to data centers and the chips needed to power artificial intelligence systems. Although many Americans have stock market exposure through retirement and pension funds, the gains have disproportionately benefited wealthier households. The richest 1% of Americans own nearly half of US stock market investments, according to the analysis.

This divergence has contributed to what economists describe as a K-shaped economy, in which wealthier households benefit from rising asset values while other Americans face pressure from higher living costs.

Interest rates remain another source of financial strain. The Federal Reserve uses rate adjustments to balance inflation and economic growth, with higher rates making mortgages, car loans and business borrowing more expensive. Lower rates can stimulate economic activity but risk reigniting inflation.

When Trump began his second term in January 2025, the Federal Reserve was already reducing interest rates. The Guardian's analysis highlights how borrowing costs, inflation and employment conditions continue to shape the economic outlook as voters prepare for the midterm elections.