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Your guide to what Trump\u2019s second term means for Washington, business and the world<\/p>\n
On the campaign trail last year, Donald Trump vowed to \u201cimmediately bring prices down, starting on Day One\u201d. Yet since his return to the White House in January, inflation has remained elevated \u2014 and voters have noticed. The US president\u2019s approval rating has slipped, weighed down by concerns over the cost of living. However, on Wednesday<\/a>, he claimed America\u2019s affordability woes are a \u201ccon job\u201d and a \u201choax\u201d perpetuated by Democrats. In reality, although Trump inherited an economy strained by rising grocery, housing and healthcare costs, his policies have, so far, tended to make matters worse.<\/p>\n Prices jumped about 18 per cent over former President Joe Biden\u2019s term. Under Trump<\/a> the cost of some symbolic goods, such as eggs and petrol, have come down, but economy-wide inflation has edged higher, adding to the cumulative pain. Data released on Friday showed annual growth in the US personal consumption expenditure price index rose to 2.8 per cent in September, up from 2.3 per cent in April, when Trump unveiled sweeping tariffs.<\/p>\n Import duties have pushed up the cost of trade-dependent goods<\/a>, including cars and clothing. They have also contributed to higher food and drink prices, including for beef, coffee and some fruits. Likewise, duties on raw materials including copper and timber are filtering into the cost of residential building work, an unwelcome development when the US house price-to-income ratio is near an all-time high.<\/p>\n Tariffs are not the only new pressure point. The administration\u2019s crackdown on undocumented workers has tightened labour supply in farming and construction, which risks pushing up costs in sectors already grappling with shortages. Meanwhile, rising electricity prices in some states partly reflect surging demand from energy-hungry data centres.<\/p>\n Broader economic conditions have not helped poorer households either. They have been hit by weaker wage growth<\/a> and a slowdown in hiring. Under the One Big Beautiful Bill Act, many lower-income Americans could lose food benefits support and subsidies for health insurance. Consumer sentiment among the bottom third of earners has dropped to its lowest on record.<\/p>\n