Trump says inflation is gone. The data shows 4.2%.

By Olivia Hart

US inflation reached 4.2% in May, according to The Guardian’s review of economic data during Donald Trump’s second term, while the president told a Montana rally: “We don’t have inflation.” Trump also said: “We’re richer now.” Gas prices and borrowing costs have risen, job creation has slowed sharply, and stock gains have concentrated among the wealthiest households.

The Guardian said Trump won the 2024 presidential election promising to reduce inflation and undo what he described as the Biden administration’s economic damage. A Harris Poll for The Guardian found that nearly two-thirds of respondents, including some Republicans, believed the country was experiencing a recession. Many cited higher prices, while respondents also reported difficulty saving and one-third said a surprise bill could sink them financially.

Those findings contradict the president’s rally rhetoric, although the source provides no sample size, fieldwork dates or margin of error for the poll. It establishes broad dissatisfaction, not a precise measure of how many voters can afford current prices. The economic data nevertheless shows where that dissatisfaction comes from.

What has inflation done since Trump returned?

The Guardian’s inflation series shows improvement, reversal and another increase rather than a sustained return to price stability.

• Inflation peaked at 9.1% in June 2022, a 40-year high, as pandemic stimulus packages fed into consumer prices.
• The rate fell to 3% in January 2025, the month Trump began his second term, and to 2.3% in April 2025, its lowest level since 2021.
• Tariffs on nearly everything the US imports then pushed inflation back to 3% in September 2025. After many tariffs were paused and eventually found illegal, inflation eased to 2.4% in both January and February 2026.
• The Iran war and its effect on oil prices pushed inflation to levels last seen in 2023. Inflation reached 4.2% in May and has remained above 3.4% since.

The United States has now gone nearly six years without inflation at a manageable 2%. The sequence suggests that earlier disinflation stalled before the latest oil shock, rather than delivering a durable price reset.

Why are gas prices such a large political grievance?

Gas was the most common financial pain point in the Harris Poll for The Guardian, with 83% of respondents saying pump prices were denting their finances. The Guardian linked renewed pressure to the Iran war, which blocked the Strait of Hormuz shortly after the conflict began. Roughly one-fifth of the world’s oil normally passes through that route, and its closure increased prices worldwide.

The United States is a major oil producer, yet domestic gasoline prices still increased. AAA reported an average price of $4.32 a gallon in mid-October, nearly $1.30 higher than a year earlier, an increase of about 43%. In Texas, gasoline cost $3.81 a gallon, up from $2.64 a year earlier. California drivers paid $6.21, about $1.89 more than the national average. These figures are point-in-time snapshots, not measures of household fuel spending.

The burden is visible at the pump even where domestic production remains substantial. Gas prices also leave households less room to absorb higher costs elsewhere.

Is the US job market strong or weak?

The Guardian described a labor market with limited growth and considerable uncertainty. US employers added 181,000 jobs in 2025, compared with 2.2 million in 2024. That represents roughly 92% less job creation, although the unemployment rate remained just above 4%.

The source attributed slower hiring to harsher immigration policies, uncertainty surrounding tariffs and higher supply prices. Economists call this a “low-hire, low-fire” economy, in which employers are neither adding workers aggressively nor laying them off in large numbers. The article does not provide monthly hiring data, wage growth or labor-force participation, so low unemployment alone cannot establish a broad labor-market boom. Hiring has cooled sharply without producing a comparably large rise in unemployment.

Why have stocks prospered as households struggle?

The S&P 500 continued to rise after Trump took office, recovering from dips during his first tariff announcement and the early days of the Iran war. The Guardian said economists largely attribute the acceleration to artificial-intelligence investment. Technology companies are spending billions of dollars on data centers and chips needed to run AI systems.

The gains have not been distributed evenly. The top 1% own nearly half of stock-market investments, according to The Guardian, while many other Americans hold equities through retirement and pension funds. Economists cited by the source described the result as a K-shaped economy: wealthier investors benefit from rising markets while higher prices squeeze household budgets.

The source did not identify the economists or quantify the S&P 500’s gain, leaving the AI explanation broad rather than independently measurable. Stock wealth has nevertheless grown alongside a sharp deterioration in what most households pay for essentials.

What do higher interest rates mean for households?

The Federal Reserve uses interest rates to balance inflation and employment. Raising rates can restrain prices but weaken hiring, while lowering rates can support growth but revive inflation. When Trump entered office in January 2025, the Fed was midway through a series of reductions. Officials cited cooling inflation and slower labor-market growth, and the target range stood at 4.25% to 4.5%, one percentage point lower than a year earlier.

Tariff uncertainty then led the Fed to pause its reductions while Trump continued pressing for lower rates. The Guardian reported that cuts resumed in fall 2025 once tariffs appeared to have less long-term price effects. The Fed then held rates steady for months as the Iran war’s economic effects emerged. In September, it raised rates by a quarter point, its first increase since 2023. Trump-appointed Fed Chair Kevin Warsh said: “inflation is too high and has been for too long.”

The policy shift has reached households through borrowing costs. The rate on a 30-year mortgage fell below 6% in February for the first time since 2022, but has since risen above 7%. Lower inflation offers little comfort when gasoline, credit costs and mortgage payments remain elevated.

The central tension is measurable: prices have reaccelerated, hiring has slowed and borrowing has become more expensive. Trump’s claim that Americans are richer will face a stiffer test if these costs persist through the election.