Before the US midterm elections: What is Trump's economic record?

Analysis of midterm elections in the USA This is Trump's economic balance as of: November 2nd, 2026 • 12:25 p.m

The economy is growing, but many Americans suffer from the high cost of living. The US labor market is losing momentum and national debt is rising. How is the United States economy doing?

Before the midterm elections on November 3rd, US President Donald Trump is trying to present economic development as a success of his administration. But at the gas station, in the supermarket and when financing a home, many Americans experience a different reality.

A survey by the University of Michigan on consumer sentiment shows that people are currently less confident about the US economy than they were during the 2020 corona pandemic or the 2008 financial crisis. Unlike back then, the country is not in a recession.

Gross domestic product (GDP) is one of the most important indicators of economic development. In the third quarter of 2026, the US economy grew at an annualized rate of 3.4 percent - after 2.2 percent in the second quarter and 2.5 percent in the first quarter.

During the election campaign, Trump repeatedly emphasized that growth had never been so strong. But the numbers say something different. GDP grew by 2.3 percent under Trump last year. While that is solid, it is not as strong as economic growth under Biden. In 2024 this was 3.0 percent and in 2023 it was 2.9 percent. This is shown by figures from the US Department of Commerce.

“The US economy is currently growing quite robustly, although not at a particularly high pace,” says Klaus-Jürgen Gern from the Institute for the World Economy in Kiel to the ARD financial editorial team. There is currently little to indicate an impending noticeable slowdown.

The growth comes primarily from the private sector, explains Thomas Obst, economist and expert on foreign economic activity at the Institute of German Economics (IW) in Cologne. "Despite very poor consumer sentiment, private consumption remains stable and is driving GDP growth." Investments also contribute to this.

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Trump had promised to curb inflation. At a campaign appearance on October 3, he said: "We have almost no inflation." But in September consumer prices were 3.7 percent higher than the same month last year - and thus well above the US Federal Reserve's two percent target.

After a decline at the beginning of the year, increased energy prices drove consumer prices up again. “Although inflation was already falling towards the two percent target at the beginning of 2026, the Iran war triggered an energy crisis that is also driving inflation in the USA,” explains Obst in an interview with the ARD financial editorial team. Gasoline and diesel are particularly hard on households.

“Companies in particular are currently benefiting from economic growth, and it primarily benefits the wealthy through rising share prices,” says Gern from the Institute for the World Economy in Kiel. The income gap has widened further. “The majority of Americans with low assets and below-average incomes, however, suffer from the increased cost of living,” said Gern.

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Trump's tariff policy also affects prices. According to Federal Reserve calculations, the tariffs imposed in 2025 increased the prices of consumer goods by 2.9 percent through February 2025. Yale University's Budget Lab estimates this will cost the average household $1,100 this year.

According to Gern, the consequences of the customs policy have so far been less than many analysts feared. The customs duties actually paid were significantly lower than the announced tariff rates suggested.

The tariffs would still have consequences for the industry: some companies were planning to relocate their production to the USA. At the same time, the trade barriers made existing production processes more difficult and put a strain on export-oriented companies in particular. “On balance, the decline in production in the manufacturing sector that some feared has not occurred. In fact, it has recently increased slightly,” said Gern.

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The labor market presents a mixed picture. The unemployment rate was 4.2 percent in September and thus remained at a comparatively low level.

At the same time, only 29,000 new jobs were created outside of agriculture. Under Biden, the US economy gained around 200,000 jobs per month in 2023 and 2024. "Trump's promise to strengthen the middle class in America through well-paid jobs in the manufacturing sector has not yet taken place," says Obst from IW Cologne.

Gern points out that not only employment but also the labor supply is growing more slowly. Net immigration has practically come to a standstill. That's why the unemployment rate remains at just over four percent despite the weak job growth.

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A key growth driver is corporate investment, particularly in artificial intelligence (AI), semiconductors, data centers and energy infrastructure. Obst sees this as an important support for the economy. Gern from the Institute for the World Economy in Kiel emphasizes that the AI ​​boom is crucial for economic strength, but cannot be attributed to measures taken by the Trump administration.

It remains to be seen whether the billion-dollar expenditure will pay off in the long term. The boom could increase productivity. However, if the returns fall short of expectations, there is a risk of overinvestment.

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Another risk is US government finances. Federal debt exceeded $40 trillion for the first time in August. “The debt level is now 125 percent of gross domestic product, almost as much as in Italy,” says Gern. The high financing requirement is driving up capital market interest rates, while at the same time the interest burden in the budget has increased significantly.

“This means that the subsequent administration takes on a heavy burden,” says Gern. The more difficult immigration will also slow down growth in the long term because fewer additional workers will be available. This in turn makes it more difficult to reduce the debt ratio.

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An analysis by The Economist shows how different the consequences are. As a result, Trump's policies are likely to cost the poorest ten percent of US households an average of almost three percent of their income in 2026. The richest ten percent, on the other hand, could gain almost three percent. According to the analysis, middle-income households would have to expect losses of more than $400.

The US economy is currently growing, consumption remains stable, and AI investments are in full swing. At the same time, inflation, weaker hiring and high debt are weighing on the outlook. The economic situation can therefore be described neither as a crisis nor as an extraordinary boom. “The American economy is still very dynamic. But cracks are starting to appear in the system,” said Obst.

This topic in the program: RBB24 Inforadio | News | Oct 28, 2026 | 5:28 p.m