A Year in Review: How the Trump Administration’s Economic Policies Made Life Less Affordable for Americans

This column contains a correction.

After the first year of the Trump administration, working Americans are feeling the consequences of the administration’s misguided economic policies. 2025 was marked by chaotic tariff announcements, increasing costs for everyday essentials, and rising unemployment, as well as historic cuts to health care, food assistance, and clean energy that are driving up costs. The Trump administration’s first year of economic turbulence does not leave most Americans optimistic about the year ahead, with almost 70 percent of Americans predicting 2026 will be a year of economic difficulty.

The Trump administration’s tariffs are driving up household costs

Americans are feeling the financial strain of the administration’s economic policies, with two-thirds of Americans expressing concern in December 2025 about the impact of tariffs on their finances. According to the Harvard Business School Pricing Lab, the costs of everyday household items have risen following the Trump administration’s massive new tariffs. Compared with pre-tariff trends from October 2024 to March 2025, the prices of household essentials increased significantly in 2025, including nondurable household goods such as cleaning supplies and toilet paper (up 5 percent), household furnishings (up 8 percent), and clothing (up 14 percent).** The Trump administration’s tariffs are also increasing the costs of big-ticket items such as cars and making it more expensive to build new homes. According to the Yale Budget Lab, the Trump administration’s tariffs will cost the average household $1,700 annually. Despite the Trump administration’s claims that it would end inflation on “Day 1” of the second term, inflation remained above the Federal Reserve’s target rate of 2 percent throughout 2025. Two notable studies have attributed elevated inflation to the Trump administration’s tariff policies, finding that the tariffs add as much as 0.7 and 0.5 percentage points to the consumer price index and the personal consumption expenditures price index, respectively.

Grocery prices are higher

The Trump administration promised to lower grocery prices on Day 1, yet on Day 365 food prices continue to reach record highs. In December 2025, food prices grew at their fastest monthly rate since fall 2022. The price of beef has increased 16 percent and coffee has risen by nearly 20 percent between January and December 2025. American consumers paid more than 6 percent more for fruits, as well as for fish and other seafood, as a direct result of the administration’s tariffs, compared with pre-tariff trends. One analysis of a typical supermarket shopping cart found that prices increased by an average of 5 percent from December 2024 to December 2025. Grocery prices are the top concern for many Americans, as most adults reported feeling stressed about grocery costs in 2025 and nearly half of respondents reported difficulties affording food. This is particularly concerning as cuts to the Supplemental Nutrition Assistance Program go into effect following the Big Beautiful Bill that President Donald Trump signed in July 2025, a law that makes the biggest-ever cuts to people’s pantries.

There are more workers unemployed and fewer job opportunities

Unemployment ticked up to its highest level in more than four years in November 2025, growing from 4 percent in January 2025 to 4.4 percent in December. (Figure 1) While 0.4 percentage points may seem relatively small, that is an additional 638,000 workers without jobs. Job seekers are struggling to find opportunities in the current economy, with the typical person taking 10 weeks, on average, to find a job after becoming unemployed in 2025. People of color, especially Black men and women, are experiencing greater difficulty finding work during the Trump administration’s first year. Additionally, younger workers struggled to find opportunities: The unemployment rate for workers ages 16 to 24 jumped by 1.3 percentage points from January to December 2025

The Trump administration’s first year in office marked the weakest job growth outside of a recession since 2003, with only 584,000 jobs added for the full year, compared with more than 2 million in 2024. Of those jobs, 85 percent were added before the administration announced the “Liberation Day” tariffs in April 2025. Average monthly job growth in 2025 was less than one-third of the 2024 average, at 49,000 jobs per month compared with 168,000 per month in 2024. (Figure 2)

Despite the Trump administration’s claims that the tariffs would bolster American manufacturing in 2025, the manufacturing industry lost 72,000 jobs from April to December 2025. Employment was growing slowly before the tariffs, but every month after they were enacted saw job losses for manufacturing workers. (Figure 3)

Health insurance is more expensive

The Trump administration and congressional Republicans made deep cuts to health care in the Big Beautiful Bill, and Americans are seeing the costs of health insurance rise in 2026.  The Affordable Care Act’s enhanced premium tax credits expired at the end of 2025, resulting in significantly higher premium costs for millions of Americans with marketplace coverage. For 2026, net premium payments were expected to increase 114 percent from the year prior. For people with incomes below 250 percent of the federal poverty level, premiums are projected to cost over four times more in 2026. In 2025, on average, a 55-year-old couple earning $90,000 a year paid $638 per month, or $7,650 per year, for a silver plan; today that same plan costs $2,179 per month, or $26,153 per year. Some marketplace insurers also raised rates to account for tariff impacts on the industry. As a result, 1.4 million fewer Americans have selected marketplace plans in 2026, and that enrollment decrease is expected to grow as consumers realize their costs have spiked. Americans with employer-sponsored insurance are also experiencing increased premiums, as new Trump administration regulations allow private health insurance plans to charge higher deductibles and cost-sharing this year.

Residents in nearly every U.S. state face higher utility bills

Millions of residents across 49 states and Washington, D.C., will face higher utility bills or proposals for increased rates by 2027—costing consumers nearly $85.8 billion by 2028. In 2025, electricity prices increased by 2.5 times more than the annual inflation rate, which is the highest annual increase since December 2014. *** Average natural gas wholesale spot prices also increased 56 percent in 2025 from the 2024 annual average, despite President Trump’s promise to cut energy prices in half within his first 12 months. Home heating costs are projected to rise in the winter months as a result of higher energy costs, making American households in several states more vulnerable to falling behind on utility bills and facing utility shutoffs. Within the first half of the Trump administration’s second term, an additional 117,000 households went into severe utility debt—now affecting roughly 14 million Americans across the country. The Trump administration’s repeated attacks on clean energy—cutting thousands of jobs in the clean energy sector, gutting renewable energy programs, canceling or delaying private investment, and making the United States more dependent on oil—are directly contributing to rising utility prices.

Conclusion

Despite President Trump’s claims that 2025 was the “greatest first year in history” for an American president, Americans’ attitudes about their economic security and the latest economic data say otherwise. With increased costs of everyday items due to tariffs and fewer job opportunities, families are feeling the direct impacts of the Trump administration’s harmful economic policies.

The authors would like to thank Emily Gee, Lily Roberts, Trevor Higgins, Ryan Mulholland, Shannon Baker-Branstetter, Topher Spiro, Jazmine Amoako, Chester Hawkins, Cindy Murphy-Tofig, and Mona Alsaidi for their assistance with this article.

* Correction, January 20, 2026: This column has been corrected to state that the average monthly job growth in 2024 was 168,000 jobs per month.

** The pre-tariff trends were estimated by Harvard Business School researchers using price data observed between October 2024 and March 2025, prior to the new tariff announcements. This baseline was used to identify how much post-tariff prices deviated from the path they had been following. Data last accessed January 16, 2026.  

*** CAP analysis of the U.S. Bureau of Labor Statistics consumer price index for all urban consumers and electricity for all years beginning from December 2001 to December 2025. Data last accessed January 16, 2026.