With less than two months until the midterm elections, President Trump commenced a final push this week to preserve his Republican majority in Congress, arguing that the United States under G.O.P. control had brought prices “way, way down.”
But for many families and businesses, the economy appeared to be on far shakier footing by Friday. Fuel prices soared, mortgage costs climbed and inflation registered uncomfortably high, testing the public’s patience with Mr. Trump’s frequent assurances that the country is on the right track.
The contrast underscored the political and economic stakes for Mr. Trump, who may soon face the wrath of an electorate long spurned by promises in Washington to lower the cost of living. As November draws closer, prices have risen under the president’s leadership, driven largely by an agenda that has included two years of punishing trade brinkmanship and a prolonged war with Iran.
The consequences were evident in the latest gauge of the Consumer Price Index, released on Friday. The report showed that prices rose at an annual pace of 3.4 percent in August, which increased the odds of the Federal Reserve’s raising interest rates next week.
The data came on the same day that a separate, long-running survey from the University of Michigan found that consumer sentiment dropped sharply this month. In that report, Americans expressed new worries that the economy was sputtering, and that inflation would continue to rise.
The unease set the stage for Mr. Trump’s renewed push this week to make the case to voters that he has helped, not hurt, the economy. Over two days of speeches at his party’s midterm convention in Dallas, the president labored to convince Americans that Republicans had achieved “tremendous economic success.”
But Mr. Trump did not limit himself to a brash defense of his record. The president also said he would send a $5,000 check to American citizens if Republicans retained the House and Senate in November, though he has failed to deliver on similar promises in the past.
“So if the Republicans win, you win with us,” Mr. Trump said, soon after adding: “Congratulations. Now all we have to do is win.”
The White House did not respond to a request for comment.
For Mr. Trump, the fight with inflation has proved so pernicious that it has overshadowed even the few bright spots in the economy. Despite nearly two years of policy tumult, the labor market has remained strong, the economy is growing and the country is witnessing a boom around artificial intelligence, one that has generally delighted financial markets.
But those positives have not always been obvious or tangible to voters, who have suffered through years of compounding costs that peaked during the coronavirus pandemic. Those financial strains continued into August, when prices rose faster than hourly wages on a year-over-year basis for the fifth straight month.
“The economy is performing well, but this isn’t buoying consumer attitudes,” Oren Klachkin, the financial market economist for Nationwide, wrote in an analysis of the new inflation data on Friday. “Rather, they’re squarely focused on rising prices and interest rates eating into purchasing power.”
In an interview, Mr. Klachkin added that he did not see inflation “coming down at a meaningful pace any time soon.” He cited a range of risks, including uncertainty around the tariffs in Mr. Trump’s trade war and the war with Iran.
Both of those conflicts worsened this week, a period that was not captured in the latest inflation report. But Americans still felt the consequences. The return to hostilities in Iran, for example, sent the price of Brent crude, the global benchmark, to $110 per barrel briefly on Friday.
It was the first time since July that oil prices had reached those levels, and in the United States, it coincided with a continued surge in gas prices. Nationally, gas averaged nearly $4.30 per gallon by Friday, according to AAA — well over a dollar more than a year ago. Still worse was the cost of diesel, which topped $6 per gallon, setting a record that could deeply affect shipping and transportation.
The increase prompted Kevin Hassett, the director of the White House National Economic Council, to acknowledge that soaring diesel costs in particular represented a “big, big issue” for the economy. In a Friday appearance on Fox Business, he pointed to geopolitical uncertainty — including in the Middle East — as the root cause.
But there was no sign this week that the war with Iran was close to finished. Even Mr. Trump acknowledged at one point that high oil and gas prices could persist until “right after the election,” though he predicted costs would fall quickly, contrary to warnings from economists.
“They’re going to be tumbling down, and we’ll get them down. I think for gasoline, we’ll get them below $2 a gallon,” the president told reporters, adding: “I think it’s going to take a little bit longer than the midterm.”
The renewed energy shock created more headaches for the Fed and its new chairman, Kevin M. Warsh. As the Fed eyes a rate increase to bring inflation into check, Mr. Trump has redoubled his demands for significant rate cuts. Absent a steep reduction, the president even threatened last week that he could cut off all trade with countries that sell more to the United States than they buy. Rates are now in a range of 3.25 to 3.75 percent.
On Wall Street, the economic headwinds also helped to push up the cost of the government’s own borrowing all week. That came in the form of higher yields, which topped 4.9 percent on 10-year bonds, the highest level seen since 2023.
The rise carried significant implications, particularly for homeowners, since mortgage rates closely track yields on those bonds. The average rate on a 30-year loan reached around 6.8 percent last week, according to Michael Fratantoni, the chief economist at the Mortgage Bankers Association, a 15-month high.
At the start of the year, Mr. Trump had promised an aggressive plan to lower housing costs. Since then, a confluence of factors has sent mortgage rates skyrocketing, and led Mr. Fratantoni to predict on Friday that it could reach “at or above 7 percent” soon.
So, too, did high yields raise the costs for Washington to service its own debts, which recently surpassed $40 trillion under Mr. Trump. But an attempt by Treasury Secretary Scott Bessent to buy up old bonds this week failed to push down yields, as markets shrugged off the intervention.
Brett Loper, the executive vice president for policy at the Peter G. Peterson Foundation, which supports deficit reduction, attributed the poor reception to the many “tectonic forces at play,” including the fast-growing U.S. debt.
Add to that Mr. Trump’s new sales pitch to voters, promising $5,000 to Americans if Republicans prevail in the midterms — a plan that Mr. Loper estimated could cost $1.2 trillion.
That price tag, on top of existing fiscal woes, would probably “lead to greater inflation and higher interest rates,” he said.
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