Another Week, Another Slowdown in Trump’s Economy as Households Brace for Up to 600% Spike in Health Care Prices
Another Week, Another Slowdown in Trump’s Economy as Households Brace for Up to 600% Spike in Health Care Prices
Evidence continues to mount that American families are struggling in the Trump economy, and this week’s Federal Reserve small rate cut, done in response to a stalled job market, will not provide relief. Wage growth is slowing, and Americans are amassing more debt as they struggle to keep up with rising prices on everyday goods. Relief isn’t in sight: families are in for yet another Trump price hike with open enrollment season around the corner, when tax credits that help more than 20 million Americans afford health care coverage will expire. New Groundwork data warns that an up to 600% spike in health insurance premiums will hit working-class Americans If Congress fails to act on expiring Affordable Care Act tax credits by November 1st.
As polling shows that 81% of Americans say that health care costs are a problem for them and their families, read a statement from Groundwork Collaborative’s Executive Director Lindsay Owens on House Republicans’ vote to keep health care prices high.
This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular, hurting the economy, and harming America’s workers.
Polling and Economic Indicators on Trump’s Handling of the Economy:
- The housing market remains soft: new housing permits fell 3.7% in August and are down more than 11% from last year. Home construction also slowed, with housing starts dropping 8.5% in August and down 6% from last year.
- An analysis of recent Federal Reserve data by Moody’s Analytics Chief Economist Mark Zandi found that the richest 10% of households now drive nearly half (49.2%) of all U.S. spending, up from 45.7% a decade ago. In August, that divide showed up clearly: spending by low-income households grew just 0.3% from a year earlier, while higher-income households increased their spending by 2.2%.
- Import prices rose 0.3% in August, the largest jump in non-fuel goods since April, driven by higher costs for consumer products, machinery, cars, and everyday items like medicine, clothes, and household goods. This suggests tariff-related pressures and supply chain adjustments are hitting American producers and consumers’ pocketbooks. Fed Chair Powell noted tariffs are already adding an estimated 0.3 to 0.4 percentage points to inflation.
- According to the Federal Reserve Bank of New York, household debt climbed to a record $18.4 trillion in the second quarter of 2025, up 3.3% from last year. Credit card balances also rose by $27 billion in a single quarter, up 5.8% over the past year, and delinquencies edged higher. Families are leaning more on credit to cover everyday costs, leaving them increasingly vulnerable to an economic slowdown and higher prices.
- Additionally, a new report from FICO found that the national average credit score, which had been steadily increasing for over a decade, fell for the second year in a row. Overall, consumers are accumulating more debt, causing an increase in credit card balances and increase in missed payments.
Additional Indicators:
- Recent polling from Fox News finds that 81% of Americans say that health care costs are a problem for them and their families, including 51% who say they are a “major problem.” Before the Affordable Care Act (ACA) open enrollment period begins on November 1st, Americans covered by ACA Marketplace plans will get notices from their insurance companies notifying them of increased premiums and reduced subsidies. The expiration of enhanced premium tax credits that help 22 million Americans afford health coverage through the ACA Marketplace will hike out-of-pocket premium costs an estimated 75% and leave as many as 4 million Americans uninsured. Premium hikes will top 90% in many rural areas.
- For a typical family of four with a household income of $80,000, monthly premiums will increase 113%, from $263 per month to $560 per month, as a result of the expiration of enhanced subsidies.
- The lowest income Americans would face the steepest premium increase: A single adult earning $25,000 would see premiums rise by 573%.
- The labor market has slowed. According to the Bureau of Labor Statistics, payroll job gains have slowed to an average of just 29,000 per month over the past three months. More than 1 in 4 workers without jobs have been unemployed for at least 6 months, the highest point since the pandemic. Fed Chair Powell underscored this weakness this week, noting that both labor supply and demand have fallen sharply and that the recent pace of job creation is running below the break-even rate needed to hold the unemployment rate steady.
Expert Commentary:
- Matt Schulz, chief credit analyst at LendingTree reacted to the national average credit score falling for the second consecutive year: “I’m not surprised that credit scores are slipping. Millions of Americans are struggling mightily in the face of stubborn inflation, high interest rates, a difficult job market and overall economic uncertainty — and tough times often force tough decisions.”
- Vice president of public affairs at the Texas Association of Health Plans Blake Hutson commented on rising health care costs: “This is kind of a perfect storm. You’ve got increasing medical costs, the expiration of the tax credits, and then you end up with a much less healthy risk pool. We’re really worried about the impact on Texans that buy coverage on their own.”
- Former Deputy Director of the White House National Economic Council Bharat Ramamurti wrote about Trump’s attempts to control the Fed: “Ultimately, this episode shows that Trump can influence the Fed’s rate-setting decisions even without the extremely heavy-handed move of trying to fire Fed Chair Powell. The question now is whether it will bring him anything more than a short-term win, or will instead simply force the Fed into an embarrassing reversal if inflation continues to worsen in the coming months.”
- Senator Elizabeth Warren (D-MA) responded to the Fed’s decision to cut interest rates: “I’m reminded that Jerome Powell said last month that the Fed would have cut interest rates back in February except for the concern about the chaos that Donald Trump was causing to the economy because of tariffs. That means for 7 months now families have been paying more on credit cars and car loans.”
- In an op-ed about the current state of the U.S. economy, Chief Economist at Navy Federal Credit Union Heather Long wrote: “The key to understanding the economy is to recognize that two trends are propping up growth: spending by the rich and companies investing heavily in the AI boom … So far this year, business spending on software and data centers — mainly for AI — has been a bigger contributor to the economy than consumption. That is stunning.”
- Alex Jacquez, Chief of Policy and Advocacy at the Groundwork Collaborative, shared his reaction to the U.S. Senate confirming Dr. Stephen Miran’s nomination to the Federal Reserve Board of Governors: “Putting a yes-man like Stephen Miran on the Federal Reserve Board threatens the Fed’s credibility and shakes confidence in U.S. markets. Miran helped craft the very policies that are driving up costs and squeezing American families. The public deserves leaders who fight to lower prices — not enablers of a rigged economy that favors the wealthy.”
