Trump Economic Agenda Increasing Prices on Families, Driving the U.S. Toward Stagflation

Trump Economic Agenda Increasing Prices on Families, Driving the U.S. Toward Stagflation

Each week brings more concerning economic news for American families as we enter the seventh month of Trump’s second presidential term. During a speech at Jackson Hole, Fed Chair Jerome Powell warned the effects of tariffs are weighing on consumers through higher prices, with the potential to get even worse, and driving us toward stagflation.

Major retailers such as Walmart and Home Depot revealed that the Administration’s economic policies are raising costs for consumers; soft drink brand PepsiCo will increase prices; and gaming just got more expensive as tech giants hike prices for PS5, Xbox, and Switch consoles. All the while, the Trump administration and the GOP are running away from the fact that their policies are squeezing families dry — by either refusing to face their constituents in person or attempting a deceptive rebrand of their deeply unpopular budget law. American families see right through it as they grapple with higher grocery, utility, and healthcare bills.

This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular and hurting the economy.

Polling and Economic Indicators on Trump’s Handling of the Economy:

• Trump and the GOP’s economic policies are deeply unpopular as 53% of Americans believe Trump’s tariffs are causing chaos and 44% of Americans are most concerned about tariffs.
• 31% of Americans report that Trump prioritizing the rich and powerful is most concerning as his tariffs and the chaos he’s wreaking on our economy squeezes everyday families. Corporations are seizing the moment to pad their margins and deliver record returns for their shareholders, leaving consumers to foot the bill. Corporate stock buybacks are on track to reach a record high this year with nearly $100 billion announced to date and annual totals projected to surpass $1.1 trillion.
• New numbers reveal that Trump’s economic approval is underwater by double digits (net -11) and two-thirds of Americans are negative about the current state of the economy (66%).

Additional Polling and Economic Indicators:

• According to the S&P Global US Flash PMI in August, tariffs were reported as the key driver of further cost increases in August. Companies across both manufacturing and service sectors collectively reported the steepest rise in input prices since May and the second-largest increase since January 2023. Goods price inflation is the highest seen over the past three years, and service sector price inflation was the sharpest since August 2022.
• The National Association of REALTORS Existing-Home Sales Report found that home prices rose in July for the 25th consecutive month, and the national median sales price increased to $422,400, the highest for any previous July in 26 years.
• The Philadelphia Federal Reserve Manufacturing Index declined from 15.9 to -0.3 in August, with indices for new orders and shipments both declining as well.
• The Conference Board Leading Economic Index inched down by 0.1% in July. In the first half of the year, the LEI has fallen by 2.7%. The Conference Board expects the economy to weaken “as the negative impacts from tariffs become more visible.”
• The Bankrate 2025 Wage to Inflation Index revealed that wages still have not caught up with inflation since the pandemic-era surge in prices. On average, Americans are earning 1.2 percentage points below the rise in the cost of living over the past four years.
• In the aftermath of DOGE cuts, the District of Columbia has retained the highest unemployment rate in the nation for the three straight months, currently sitting at 6.0%, according to the Bureau of Labor Statistics.

What the Experts are Saying:

• At the Jackson Hole Economic Symposium, Federal Reserve Chair Jerome Powell cited tariffs as the driving force behind higher prices for consumers: “The effects of tariffs on consumer prices are now clearly visible. We expect those effects to accumulate over coming months, with high uncertainty about timing and amounts. The question that matters for monetary policy is whether these price increases are likely to materially raise the risk of an ongoing inflation problem… In the near term, risks to inflation are tilted to the upside, and risks to employment to the downside — a challenging situation.”
• Chris Watling, Global Economist and Chief Market Strategist at Longview Economics, said of growing economic concerns following the Fed’s July meeting: “The manufacturing sector has had no growth in three years. Housing is deteriorating. I think this is a really clear slowdown in this economy.”
• Laura Veldkamp, Professor of Economics and Finance at Columbia Business School, warned it’s only a matter of time before more companies are raising prices on consumers: “Once everybody runs out of stockpiled inventory, everybody will be losing money. They’ll raise prices and it will be passed onto the consumer. It’s just a matter of when.”
• Groundwork Collaborative’s Managing Director of Policy and Advocacy Liz Pancotti reacted to Republicans’ attempt to rebrand their budget law: “As their signature legislative achievement, Republicans gave the ultra wealthy another tax giveaway and left hardworking American families holding the bag. No matter what slogan they slap on it, the GOP’s economic agenda is hiking prices for working families on everything from groceries and utilities to healthcare and housing.”
• Groundwork Collaborative’s Senior Fellow Kitty Richards joined The Takeout on CBS to discuss Trump’s attacks on the Fed: “This has gone far beyond criticizing the Fed or even overstepping and trying to make monetary policy himself. [Trump] is really trying to make these Fed Governors afraid. And I’m not sure that all of this pressure on the Fed is going to have the result that Donald Trump wants. It seems like he’s trying to distract from the negative economic news we’re getting, but undermining the Fed’s credibility, their ability to make monetary policy, and trust in the Fed could make it more difficult for interest rates to come down. This could make it more difficult for the Fed to manage the economy and could cause problems for Donald Trump.”

What the C-Suite is Saying: 

• Home Depot CEO Ted Decker said on an earnings call: “By a wide margin, economic uncertainty is [the] number one” reason that customers are deferring large-scale home improvement projects.
• Ross CEO James Conroy said on an earnings call: “We expect the current uncertainty in the macro and geopolitical environments to persist through the remainder of the year. In addition, we anticipate pricing across retail will move higher as we progress through the year.”