The US economy is currently expanding at an annualised rate of 2.2%, marking a growth of approximately 3.2% since the end of 2024. This growth rate has surpassed forecasts by the International Monetary Fund (IMF) and is faster than any other G7 economy over the same period.
However, inflation in the US has picked up, reaching 3.7%. This is higher than the 3% rate inherited by President Trump in January 2025. Economists estimate that inflation would have been lower without new tariffs imposed by Trump, and the US-Israel war with Iran has also contributed to rising domestic inflation, with diesel prices hitting a record high of $6.52 per gallon in September.
While median US household incomes, adjusted for inflation, rose by 2.6% in 2025 to $87,460, analysis from the Institute on Taxation and Economic Policy (ITEP) suggests that middle-income households are, on average, around $1,700 worse off in 2026. The poorest fifth are estimated to be around $750 worse off, primarily due to factors including tax cuts, the expiry of health insurance subsidies, and higher-than-expected price rises. In contrast, the richest 1% are estimated to be an average of $12,560 better off.
Job creation has slowed, with an average of 34,000 jobs added monthly since Trump's second term began, down from 122,000 per month in the final year of the previous administration. The number of Americans employed in manufacturing is slightly lower than at the start of Trump's second term. The US unemployment rate remains relatively low at 4.2%, partly attributed to a reduced available workforce due to immigration policies.
US government borrowing has increased, with the federal deficit reaching $2 trillion in the year to September 2026, equivalent to around 6% of US GDP. The IMF has warned that excessive government borrowing and rising national debt increase the risk of a future financial crisis in America.