BBC Fact-Check Finds Mixed Picture as Trump Touts US Economy Ahead of Midterms

Growth beats G7 peers but inflation, borrowing costs, and household income gains lag behind claims

By LineZotpaper

Published20 October 2026

Read Time3 min

Sources2 outlets

Ahead of the US midterm elections, President Donald Trump has been touting the American economy as "the hottest country anywhere in the world." A BBC Verify analysis finds the economy is growing faster than other G7 nations, but inflation has risen above the rate he inherited, job creation has slowed, and most households are worse off than they would have been, according to independent estimates.

President Donald Trump has repeatedly claimed he has boosted incomes, reduced inflation, and created jobs, saying the US has "the hottest country anywhere in the world." A BBC Verify fact-check examined five key indicators to assess whether the evidence supports those statements.

Economic growth: US GDP is expanding at an annualised rate of 2.2%, and the economy has grown around 3.2% since the end of 2024, before Trump began his second term. That outpaces all other G7 economies and has been faster than the International Monetary Fund had forecast after Trump announced sweeping tariffs in April 2025. However, the analysis notes that Trump later eased those tariffs, reducing the expected economic hit. A surge in AI-related data centre construction has also supported growth.

Inflation: The current inflation rate stands at 3.7%, down from a peak of 9% under Joe Biden in 2022, but higher than the 3% Trump inherited in January 2025. Economists estimate inflation would be lower without Trump's tariffs and the effects of the US-Israel war with Iran, which has disrupted Middle East oil supplies. The price of a gallon of diesel hit a record high of $6.52 in September.

Household incomes: Median household income (adjusted for inflation) rose 2.6% in 2025 to $87,460, the highest on record. But the Institute on Taxation and Economic Policy (ITEP) estimates that, factoring in Trump's tax cuts, the expiry of health insurance subsidies, and higher prices from tariffs and the Iran war, the middle fifth of households are around $1,700 worse off in 2026 than they would have been, while the poorest fifth are about $750 worse off. The richest 1% are estimated to be $12,560 better off, largely due to tax cuts. The Tax Foundation reached broadly similar conclusions.

Jobs: An average of 34,000 jobs have been added per month under Trump, down sharply from 122,000 per month in Biden's final year. The number of Americans employed in manufacturing (12.6 million) is slightly lower than when Trump's second term began. The unemployment rate remains low at 4.2%, partly because Trump's immigration crackdown has reduced the size of the labour force.

Borrowing costs: The federal deficit reached $2 trillion in the year to September 2026, equivalent to about 6% of GDP and projected to rise. The 10-year US government bond yield has risen above 5%, the highest since 2007, pushing up mortgage rates. The interest rate on a new 30-year mortgage has risen to 7.4% from 6.9% when Trump returned to office, further straining housing affordability. The IMF has warned that excessive US borrowing risks a future financial crisis.

Analysis

Why This Matters

The midterm elections will test whether voters credit Trump's economic claims or blame him for rising costs and slowing job growth.
Most households are experiencing real financial pressure from higher inflation and mortgage rates, even as headline growth figures look strong.
The dependency on an AI investment boom makes the economy vulnerable if that spending slows.

Background

Donald Trump launched sweeping "Liberation Day" tariffs in April 2025, aiming to boost domestic manufacturing. He later eased many of them. In the same period, the US became involved in a war with Iran, disrupting global energy supplies and pushing up fuel prices. The economy has also been buoyed by heavy technology sector investment in artificial intelligence, including data centre construction. The IMF and several think tanks have questioned the sustainability of this expansion given rising government debt.

Key Perspectives

President Donald Trump: Argues the economy is the world's strongest, with record household incomes, low unemployment, and GDP growth outpacing other developed nations. He attributes these gains to his tariff policies and tax cuts. Economists and think tanks (ITEP, Tax Foundation, IMF): Note that inflation has risen under Trump, job creation has slowed, and his tariffs have contributed to higher consumer prices. Most households are worse off in real terms, and the growing deficit and rising borrowing costs pose medium-term risks. Critics/Skeptics: Point out that the economy's strength is partly driven by temporary factors (AI investment, high government borrowing) and that the benefits have disproportionately gone to the richest Americans, while middle and lower-income households face higher costs for housing, fuel, and groceries.

What to Watch

Midterm election results and whether economic messaging sways swing voters.
November inflation data and whether the Federal Reserve adjusts interest rates.
Ongoing impact of the Iran war on energy prices and food supply chains.
Any pullback in AI investment as a potential trigger for economic slowdown.

Sources

How is the US economy really doing under President Trump? · BBC News
How is the US economy really doing under President Trump? · BBC News

Checked

12 claims in this story checked against 1 source: 8 supported.

Show each claim

Not in the sourcesSummary: most households are worse off than they would have been, according to independent estimates.BBC News: “the middle fifth of households are, on average, around $1,700 worse off in 2026 than they would have been, while the poorest fifth are around $750 worse off.”
SupportedTrump has repeatedly said the US has 'the hottest country anywhere in the world.'BBC News: “We have the hottest country anywhere in the world.”
SupportedUS GDP is expanding at an annualised rate of 2.2% and has grown around 3.2% since the end of 2024, more than any other G7 member.BBC News: “currently expanding at an annualised rate of 2.2%. And it has increased by around 3.2% overall since the end of 2024”
SupportedInflation is 3.7%, down from a 9% peak under Biden in 2022 but above the 3% Trump inherited in January 2025.BBC News: “The current rate of US inflation, external is 3.7%. That's still well down on the recent peak rate of 9% under Biden in 2022, but higher than the 3% rate that Donald Trump inherited in January 2025.”
Partly supportedEconomists estimate inflation would be lower without Trump's tariffs and the effects of the US-Israel war with Iran.BBC News: “US inflation would have been lower without the new tariffs imposed by Trump since he returned to office.”
SupportedDiesel hit a record high of $6.52 a gallon in September.BBC News: “hit a record high of $6.52 in September.”
SupportedMedian household income rose 2.6% in 2025 to $87,460 (inflation-adjusted), the highest on record.BBC News: “The median income - after adjusting for inflation - rose 2.6% in 2025 to $87,460, the highest on record”
Partly supportedThe Tax Foundation reached broadly similar conclusions to ITEP on household impacts.BBC News: “ITEP's estimates about the impact of tariffs on American households of different income levels are broadly similar to those of the Tax Foundation think tank”
SupportedAn average of 34,000 jobs a month have been added under Trump, down from 122,000 a month in Biden's final year.BBC News: “an average of 34,000 jobs have been added to the economy each month. But that is significantly down on the 122,000 jobs added each month in the final year of Biden's presidency”
SupportedThe 10-year US bond yield is above 5%, the highest since 2007, and the deficit reached $2 trillion (about 6% of GDP) in the year to September 2026.BBC News: “is now above 5%, the highest rate since the global financial crisis in 2007.”
Partly supportedRising government borrowing costs are pushing up mortgage rates.BBC News: “That increase in the market cost of US government borrowing also puts upward pressure on the interest rates on mortgages available to American households.”
SupportedThe IMF has warned that excessive US borrowing risks a future financial crisis.BBC News: “The IMF has warned that excessive US government borrowing, external , which it uses to bridge the deficit, and its rapidly rising national debt are raising the risk of a future financial crisis in America.”