American families pay the price of stifled growth and creeping inflation while corporations rake it in amidst havoc in Middle East
Today’s Personal Consumption Expenditure (PCE) report from the Bureau of Economic Analysis (BEA) shows the PCE Price Index climbed 2.8% between February 2025 and February 2026. The BEA also released the final estimate for gross domestic product (GDP) in the fourth quarter of 2025, which was further revised down to an annual rate of 0.5%, just one-third of the initial estimate and well below 2024 averages. All of this data predates Trump’s war with Iran, which has already driven gas prices above $4 per gallon and cut into growth forecasts, with the Atlanta Fed’s GDP tracker down to 1.6% in March.
BEA’s release this morning also revealed that corporate profits hit a record $4.4 trillion in late 2025. As a share of income, corporate profits increased to 16.6%, another record-high. The labor share of income contracted further to 50.4% as corporations rake it in at the expense of American workers.
Groundwork’s Chief of Policy and Advocacy Alex Jacquez released the following statement:
“Once again, Trump has betrayed working families. The president’s illegal war in Iran is just the latest in his misguided economic agenda that continues to pummel American families, small businesses, and communities, while padding the coffers of wealthy corporations. Today’s dismal data pulls back the curtain on Trump’s faltering economy as we wait for the full impact of Trump’s war.”
BACKGROUND
Prices were already elevated before Trump’s Iran war. The core PCE price index, which excludes food and energy prices, came in at 3% over the past year in February, well above the Federal Reserve’s 2% target.
The economy was already losing steam before the war. GDP grew just 0.5% in the fourth quarter of 2025, a sizable decline from 4.4% in the quarter prior. In 2025, GDP growth was 2.1%, the slowest growth in nearly a decade, excluding the onset of the COVID-19 pandemic.
Corporations are cashing in while families struggle under rising prices. Domestic corporate profits increased by $272 billion in the fourth quarter of last year, hitting a new record of $4.4 trillion in 2025. Corporate profits are up nearly 10% from a year ago.