Trump's economic doom loop

• Some Republicans already fear inflation could cost them dearly in the 2026 midterms, warning Trump has only a few months to reset his trajectory on voters' most important issue.
• For a president whose credibility on the economy has always been his strongest asset, the prospect of the bottom falling out is uniquely dangerous.

State of play: Trump's approval rating on inflation and cost of living currently sits at -24, nearing Biden's lows during the peak of the 2022–23 price surge, according to averages by pollster G. Elliott Morris.

• Trump's favorability on jobs and the economy overall is better, but still underwater at -13.
• 52% of U.S. adults say the economy is "getting worse," while only 24% say it's getting better and 20% say it's about the same, according to The Economist/YouGov polling.

Zoom in: Poll after poll shows Trump's Big, Beautiful Bill Act — which extended his 2017 tax cuts while slashing Medicaid and other safety net programs — is the most unpopular major piece of legislation in years.

• Trump campaign officials acknowledged the PR crisis in a closed-door briefing on Capitol Hill this week, where they urged Republicans to refer to it as the "Working Families Tax Cut Bill."
• Democrats say no amount of rebranding can disguise the reality: The poorest 25% of households lose money under the law while the richest reap the benefits, according to the Congressional Budget Office.

The big picture: The bleak voter sentiment matches increasingly bleak fundamentals.

• Inflation is creeping higher as Trump's trade war continues to reorder the global economy, with some analysts predicting drug shortages and an uncertain holiday season.
• The labor market is softening: Layoffs are rising, and the number of unemployed workers now exceeds job openings for the first time since April 2021.
• The housing market is on shaky footing, with interest rates relatively high and supply stagnant.
• Manufacturing was supposed to be the biggest beneficiary of Trump's tariffs. Instead, economic activity has shrunk for six months running and now the sector is shedding jobs.

The other side: Trump officials maintain the economy is fundamentally strong — pointing to consumer spending, corporate investment and the booming stock market — and blame media coverage for skewing perceptions.

• A nonpartisan analysis found the average American will receive a $3,752 federal tax cut in 2026 under the new law — though that's compared to a world without the bill, not today's tax rates.

• The White House is also touting no tax on tips, $1,000 "Trump accounts" for newborns and other worker-friendly provisions as proof the legislation helps ordinary households.
• Wall Street is not the economy, but the disconnect is stark: Even as Trump's poll numbers lag, the market is up more than 8% since he took office — a huge boost for the 62% of Americans who say they own stocks.

What they're saying: "President Trump's trade deals have unlocked unprecedented market access for American exports to economies that in total are worth over $32 trillion with 1.2 billion people," White House spokesman Kush Desai said in a statement.

• "As these unprecedented trade deals and the Administration's pro-growth domestic agenda of deregulation and historic working-class tax cuts take effect, American businesses and families alike have the certainty that the best is yet to come."

Between the lines: With his economic agenda already through Congress, Trump has few levers left to pull — beyond pressuring the Federal Reserve to cut rates or a possible tariff rebate check to some Americans.

• That could leave the battle over economic perception to messaging and marketing, with billions of dollars in political ad spending expected before the midterms.
• If that's the case, Trump may wind up learning Biden's hard lesson: You can't convince voters the economy is strong when their lived experience tells them it's weak.