At the One-Year Mark Into Trump’s Second Term, Americans Are Paying More and Saving Less
At the One-Year Mark Into Trump’s Second Term, Americans Are Paying More and Saving Less
Twelve months after Donald Trump returned to the White House, his disastrous economic policies are hitting Americans where it hurts most. Far from lowering prices “on day one”, Trump’s reckless tariffs, health care cuts, and tax giveaways to the wealthiest Americans have left working families struggling to make ends meet. In 2025 alone, the average family paid over $1,600 more than the year before due to inflation, with essential costs like housing and transportation rising by hundreds of dollars. Utility bills spiked 13% in the last year as Trump’s war on wind and solar energy stops new projects from coming online and squeezes household budgets. Homeownership has only become more unaffordable as Trump’s threats against Greenland and the Federal Reserve push mortgage rates higher and prevent families from purchasing — new data shows pending home sales plunged 9.3% in December, the steepest one-month drop since 2020.
Other indicators point to mounting strain across the economy. Consumer sentiment is 21% below what it was when Trump took office, as Americans’ pessimism grows in the face of the president’s economic agenda. Contrary to Trump’s repeated claims, new research finds that 96% of the burden of his tariffs are falling on the shoulders of American consumers and businesses, not being paid for foreign countries.
This week in the Trump Slump, new polling and economic indicators continue to show that one year into his term, President Trump’s actions are deeply unpopular, hurting the economy, and harming America’s working families.
Polling and Economic Indicators on Trump’s Handling of the Economy:
- It’s Trump’s economy now, and voters aren’t happy with it. A year into Trump’s second term, many voters say the cost of living is only getting worse, and trust in Trump’s handling of the economy is rapidly collapsing.
- 58% of voters say Trump’s policies are most responsible for the current state of the economy, 27 points more than former President Joe Biden, according to a poll commissioned by the Wall Street Journal.
- WSJ finds that Trump is 10-points underwater on his handling of the economy. Frustrations have increased since July, with disapproval of Trump’s handling of inflation/rising prices worsening by 6%.
- A poll from the New York Times in partnership with Siena University found that nearly 60% of voters disapprove of Trump’s economic leadership and fewer than one in three voters say the country is better off than it was a year ago.
- Even among his own 2024 voters, regret is setting in. In Navigator Research focus groups of battleground-state Trump voters, participants said they supported the president in the hope that he’d lower costs, but now feel financially strained.
- After a turbulent year, consumer sentiment is now sitting well below where it was a year ago. The University of Michigan’s Consumer Sentiment Index reached 56.4 in January, down 21% from the same point last year. The Current Economic Conditions Index — a sub-index reflecting how consumers view today’s economy — has dropped even more over the past year, down 26% from last January, as Americans worry about rising prices and a weakening job market.
- Tariffs are hitting American consumers, not foreign producers. New research from the Kiel Institute for the World Economy finds that 96% of the cost of U.S. tariffs is being paid by American consumers and businesses, pushing up prices on everyday goods.
- Households are burning through savings as price hikes on essentials strain budgets further. November’s Personal Consumption Expenditures data, delayed by the government shutdown, show Americans saved a smaller share of their pay. The personal saving rate fell to 3.7%, the lowest since October 2022.
- The same report showed that spending was driven by essentials like health care, housing and utilities, insurance, gasoline, and vehicles, expenses that families cannot avoid.
- Additionally, 33% of Americans now use credit cards to cover everyday expenses, up from 28% one year ago, according to Bankrate. Deloitte’s State of the US Consumer finds that Americans also plan to spend more on basics like housing, health care, transportation, and groceries, while discretionary spending remains far below 2021 levels.
- Home sales are slowing as prices put them out of reach for many Americans. The pending home sales index, which tracks signed contracts and signals future home sales, fell 9.3% from the prior month — as Americans are priced out of buying a home. This is the biggest monthly decline since 2020, and far below expectations of a 0.3% decline.
- Pending home sales fell in all four regions. The Midwest saw the steepest drop, down nearly 15% from the previous month. Compared with a year ago, pending home sales are down 3%.
- Factories are under strain. The S&P Flash U.S. Manufacturing PMI underperformed expectations by 0.2 points and remains among the weakest improvements in factory conditions since last summer.
- Input prices rose at the fastest rate since last September. Factory gate price inflation hit a five-month high and manufacturing job growth fell to a six-month low. Companies widely blamed tariffs and uncertainty for these conditions.
Expert Commentary:
- “The housing sector is not out of the woods yet […] After several months of encouraging signs in pending contracts and closed sales, the December new contract figures have dampened the short-term outlook […] the decline in pending home sales could be a result of dampened consumer enthusiasm about buying a home when there are so few options listed for sale. In December there were only 1.18 million homes on the market — matching the lowest inventory level of 2025.” –Lawrence Yun, National Association of Realtors Chief Economist
- “Jobs growth is meanwhile already disappointing, with near stagnant payroll numbers reported again in January, as businesses worry about taking on more staff in an environment of uncertainty, weak demand and high costs. Increased costs, widely blamed on tariffs, are again cited as a key driver of higher prices for both goods and services in January, meaning inflation and affordability remains a widespread concern among businesses.” –Chris Williamson, Chief Business Economist at S&P Global Market Intelligence
