President Donald Trump delivered a fervent defense of the US economy in his State of the Union address on Tuesday night. “Inflation is declining sharply, while incomes are increasing rapidly.” The economy is experiencing unprecedented growth. Without exaggeration, he is correct: the strength of America’s economy is evident. However, Trump is overlooking the essential issue. Voter turnout is influenced more by affordability than by economic strength. Most Americans exhibit little interest in GDP, CPI, PCE, or any of the other acronyms or data points that indicate the economy is progressing positively. Concerns regarding job security and financial anxieties that disrupt sleep patterns are prevalent: individuals grapple with the escalating costs of groceries, housing, health care, car payments, college, and child care. Trump indicated that further efforts are necessary to enhance the affordability of life in America and presented a series of new policies aimed at tackling the financial issues faced by Americans. However, Trump’s communication primarily emphasized American exceptionalism, his economic accomplishments, low inflation, and strong foreign investment. He attributed the economic decline to his predecessor and commended his administration’s efforts to restore it. “I inherited an economy that was on the brink. Now our economy is literally the envy of the world.” However, there exists a fundamental issue with that strategy. Seeking evidence? The previous quotation did not originate from the speech delivered on Tuesday. The statement originates from the 2024 State of the Union address, presented by former President Joe Biden, whose political party faced electoral defeat eight months subsequently. Trump’s message, at least on paper, holds considerable validity.
Under Trump, the metrics of employment, wage growth, consumer expenditure, and inflation appear relatively favorable or have largely maintained stability. The stock market approaches a historical peak. The US economy experienced a growth rate of 2.2% in 2025, aligning closely with the strong economic performance observed over the previous three years. The economy experienced a more pronounced slowdown than anticipated at the year’s conclusion; however, the unprecedented duration of the government shutdown hindered growth, which is expected to rebound in the current quarter. Last year was not a particularly favorable year for the labor market by any measure. However, unemployment continues to be low, and the stronger-than-anticipated hiring in January indicates that 2026 may present a significantly improved landscape for job creation. Inflation seems to be experiencing a decline once more following a tumultuous period in 2025. Paycheck growth has consistently outpaced inflation for nearly three years, enabling Americans to extend the value of their dollars. Wealthier Americans are reaping financial rewards from favorable economic trends, whereas lower-income households are progressively being marginalized. The K-shaped trend is not a novel phenomenon; however, the disparity between the affluent and the less fortunate has been expanding in recent years, especially as the housing market continues to be predominantly stagnant. Homeowners, especially those who took advantage of historically low refinancing rates during the pandemic, are generally in a more favorable position compared to individuals currently struggling to locate affordable housing options.
The increase in prices for essential goods has also had a detrimental impact. Moreover, the reduction of social services has not contributed positively to the situation. This situation has compelled the most vulnerable to confront challenging decisions. Delinquencies are increasing, with an escalating number of Americans falling over three months behind on their loans. On Tuesday, Trump attributed the inflation crisis, which has seen prices rise over 20% during Biden’s administration, to the Democrats, a situation that continues to challenge American consumers. However, Trump also justified his tariffs, which resulted in an additional $1,000 in tax expenses for the average American household last year, as reported by the conservative-leaning Tax Foundation. Following a Supreme Court ruling last week that deemed the majority of Trump’s tariffs illegal, Trump expressed strong disapproval of the decision and promptly declared alternative authorities to impose significant tariffs once more. While tariffs have not caused prices to surge as many anticipated, they continue to rank among Trump’s least-favored policies and present a political liability for Republicans in the lead-up to this year’s midterm elections. Following a flurry of affordability proposals aimed at the beginning of 2026, Trump presented additional initiatives on Tuesday night. These included a retirement plan designed for Americans lacking access to a 401(k) and stipulations for tech companies to assist in offsetting the heightened electricity costs resulting from the growing demand associated with AI data centers.
Trump also emphasized the policies he has already implemented, including tax reductions, Trump Accounts for infants, and various initiatives aimed at reducing prescription drug costs for numerous patients. The strategy implemented thus far has not yielded significant returns: The affordability initiatives have garnered varied feedback and will require time to permeate the economy effectively. Trump is not adhering closely to the established narrative. The president’s State of the Union address occurs during an economic roadshow aimed at reinforcing a key message from his staff: that the economy is robust due to the actions taken by his administration. However, the communication has occasionally become muddled as Trump deviates from the prepared remarks to emphasize other topics he seems to prioritize, including immigration enforcement and unsubstantiated claims of electoral fraud. Trump’s characterization of affordability as a “hoax” and a battle he claims to have won has not been beneficial. Currently, Trump’s optimistic rhetoric regarding the economy and trade appears to be resonating poorly with the electorate, potentially positioning him as disconnected from prevailing sentiments as a pivotal election approaches. “America is rising.” Our economy stands as the most robust globally. Since I assumed office, our GDP has increased, our trade deficit with China has reached its lowest level in more than ten years, and we are actively addressing China’s inequitable economic practices.