President Trump's second term has brought an unwelcome surprise: the American public has apparently lost confidence in his economic policies. Polling reveals that independent voters, the fickle arbiters of political fate, have driven his approval on the economy down to a mere 25 percent. This marks a dramatic reversal from his first term, when nearly half of adults gave him a thumbs-up.
What went wrong? Three things: inflation stubbornly refusing to cooperate, job creation sputtering to a halt, and inequality widening as Trump's policies apparently favor those with yachts over those with bus passes. The biggest culprit is the cost of living. According to CNN data analyst Harry Enten, Trump's average approval rating on inflation is 42 points underwater, and among independents, it's a staggering minus-60 points.
When Trump took office in 2025, inflation was actually cooling. The Fed had hiked rates from 0.25 percent to 5.5 percent in 2022-2023, and the target of 2 percent was in sight. But then Trump announced the biggest tariff increase in 100 years last April, and goods prices promptly rose. Progress stalled. Inflation then picked up to 3.3 percent in March, thanks to oil price spikes linked to the war with Iran. Higher transport, fertilizer, and food costs are expected to ripple through the economy.
The labor market has also gone from robust growth through 2024 to stagnation. Firms are hesitant to hire due to uncertainty over tariffs and AI. The unemployment rate hasn't spiked, but that's mostly because labor supply slowed due to aging demographics and Trump's immigration crackdowns. The hardest hit: near-retirees who've been laid off and young people hunting for their first jobs.
Finally, Trump's policies have become more regressive. The 2025 tax cuts primarily benefited the richest Americans, while tariffs and cutbacks in Medicaid and SNAP hit lower-income groups. Fed data shows the top 1 percent of households held about $55 trillion in assets in Q3 2025 - roughly equal to what the bottom 90 percent combined hold. Trump planned to campaign on tax refunds, but those benefits are being eroded by surging costs from the Iran war. His 2027 budget proposal boosts defense spending from $1 trillion to $1.5 trillion, with his argument being that the nation can't afford day care, Medicaid, or Medicare while fighting wars.
The big question: Can Trump swing public opinion before the midterms? Unlikely. Presidents are at the mercy of economic vagaries - voters credit them when times are good and blame them when bad, regardless of actual control. But this time, the rise in inflation, hiring slowdown, and program cutbacks are more directly tied to Trump's policies. He's reluctant to acknowledge this, and his advisors lack the clout to change course.
The Iran war isn't helping. The best hope is a quick end to the conflict and reopening the Strait of Hormuz through diplomacy, but Energy Secretary Chris Wright acknowledges oil prices may stay above pre-war levels until next year. Voters may view this war as a bigger policy mistake than Biden's chaotic Afghanistan withdrawal. So, an uphill battle? More like scaling a vertical cliff in flip-flops.