GDP growth paints a rosy picture of the economy — but most Americans have a major problem with it
Prices of essentials are still high for low and middle-income families, and job security isn't great.
Dec. 25 2025, Published 7:38 a.m. ET
If numbers and President Donald Trump are to be believed, the American economy is doing just fine. The US Bureau of Economic Analysis recently released a report that showed that GDP had grown by 4.3% in Q3, the highest out of any of the other five previous quarters. However, middle and low-income families shed light on a different ground reality. Inflation driven by the President’s tariffs has not been ideal to deal with. So, despite the positive figures, morale has not improved all that much.
According to a report in CNN, unemployment and inflation seem to remain the main concerns of citizens. “GDP is an abstract concept. But people know jobs. They know they can’t find a job if they lose theirs,” Moody’s Analytics chief economist Mark Zandi said, before adding, “And they know they are paying more for coffee, beef, electricity, child care, and just about everything else.”
Higher GDP indicates increased consumer spending, but it’s only a small part of the population that is doing so. The report suggests that higher-income consumers were the reason for increased consumer spending, rather than the majority, who are middle and low-income consumers. Those who own real estate have also seen increased purchasing power thanks to record-high values. Many eminent economists believe that it’s the perfect representation of a K-shaped economy.
Some may blame Donald Trump's tariffs for the high prices, but the rate of inflation has come down from 3% to 2.7% since he took office. However, it is still higher than the 1.7% average annual inflation rate Americans saw before the pandemic. Prices of some items have, however, come down, as eggs are 13% cheaper than a year earlier, and milk prices have also dropped by 1%.
Gasoline prices have remained under control, which has been one of the big positives for the Trump administration so far. However, prices of several other items have gone up. Americans reportedly pay 7% more on average for electricity. Prices of natural gas and beef have also surged. While salaries have also increased in this time period, many Americans believe that they are not enough to beat inflation.
Job security is also a big concern, especially since a lot of big-name companies have laid off several employees in the closing months of the year. Unemployment hit a four-year high recently at 4.6%. The CNN report claims that the number of job seekers exceeded the number of jobs for the first time in four years as well.
Hiring has also slowed down as employers are operating with fewer employees to cut costs. President Trump’s tariffs have forced businesses to reduce their workforce in order to save costs as well.
More on Market Realist: