Trump’s ‘boom economy’ faces a rocky start to 2026 with job losses, rising gas prices and uncertainty

WASHINGTON (AP) — President Donald Trump promised that 2026 would be a bumper year for economic growth, but instead it started with job losses, higher gasoline prices and more uncertainty about America’s future.

In his State of the Union address less than two weeks ago, the Republican president confidently told the country: “The booming economy is roaring like never before.” The latest batch of data on jobs, oil prices and the stock market suggests that Trump’s roar is starting to sound more like a whine.

There is a gap between the boom Trump predicted and the volatile results he achieved – a gap that may set the tone in this year’s midterm elections as he tries to defend his party’s majorities in the House and Senate. As Trump’s tariff drama continues, the war in Iran has suddenly created inflationary concerns for oil and natural gas. For the White House, it’s still early in the year and stronger growth is coming.

There are no signs of a jobs boom

“Wonderful! The Golden Age of America is upon us!!!” Trump posted on social media on February 11 after the monthly jobs report showed a gain of 130,000 jobs in January.

Since then, the job market has evaporated in worrying ways.

Friday’s employment report showed job losses of 92,000 jobs in February. January and December numbers were revised downward, with December swinging to a loss of 17,000 jobs. Monthly data can be difficult, but a trend has emerged that consistently shows weakness. Without the health care sector, the economy would have lost nearly 202,000 jobs since Trump became president in January 2025. However, his administration notes that construction job gains outside of the housing sector indicate future employment growth.

Trump often boasts that jobs go to people born in the United States, not immigrants. But the latest report has refuted some of this argument.

The unemployment rate for people born in the United States rose over the past 12 months to 4.7% from 4.4%. This means that a larger percentage of the people who Trump said would get jobs because of his campaign against immigration are actually looking for work.

Prices at the pump are rising

“Reducing energy costs is among the most important actions we can take to lower prices for American consumers,” Trump said in a speech in Texas in February before the United States and Israel attacked Iran. “Because when you lower the cost of energy, you actually reduce — all you’re doing is lowering the cost of everything.”

The president has repeatedly told Americans that keeping gas costs low will be key to beating inflation. He spoke out about the decline, citing figures that were well below the national average to reassure the public that driving was becoming cheaper.

Read more: Oil prices have risen to levels not seen in years as the war in Iran intensifies

But the strikes against Iran, which began on February 28, have crushed that narrative for now. Prices at the pump jumped 19% over the past month to a national average of $3.45, according to AAA. Investment bank Goldman Sachs warned in an analyst note that if high oil prices persist, inflation could rise from its reading of 2.4% in January to 3% by the end of the year.

The administration relies on plans to contain any increases in energy prices, and is essentially betting that the conflict will end soon or that the administration will succeed in obtaining more tankers through the Strait of Hormuz.

On Sunday as oil prices rose above $100 a barrel for the first time since 2022, Trump sought to reassure worried Americans that this was a temporary problem.

Trump wrote on social media: “Short-term oil prices, which will fall rapidly when the destruction of the Iranian nuclear threat is over, are a very small price to pay by the United States and the world, for safety and peace. Only a fool would think differently!”

Stocks are off their highs

“As you know, we set a record in history where the Dow Jones hit 50,000 points,” Trump said Thursday at the White House.

This recurring talking point is getting old. The Dow Jones Industrial Average, one of Trump’s favorite measures of success, has fallen 5% over the past month. Stocks have risen during his presidency, just as they once did when Democrat Joe Biden was president. The recent decline could be reversed if the war with Iran ends and companies post strong profits over the next year and beyond. However, the recent decline should be a warning sign, as the administration has stressed the importance of more people investing in the stock market through tools such as “Trump Accounts” for kids.

The stock market has become a barometer of how people feel about the economy, with stock investors tending to be more confident and those without money in the markets more pessimistic.

Joan Hsu, director of consumer surveys at the University of Michigan, noted that February’s “significant” increase in sentiment among people who own stocks was “fully offset by the decline among consumers who do not own stocks.”

Productivity has risen, but workers do not benefit

Trump could point to a win that the economy has become more productive — generating more value per hour worked. This is a positive sign of long-term growth in the United States and a reflection of its strong technology sector.

Labor productivity in the business sector rose 2.8% in the fourth quarter from last year, the Labor Department reported Thursday. But the challenge is that the gains may not trickle down to workers in the form of higher wages, as workers’ share of income fell last year to an all-time low, noted Mike Konczal, director of policy and research at the Economic Security Project, a nonprofit committed to liberal economic issues.

The economy has grown faster under Biden

“Under the Biden administration, America has been plagued by the nightmare of stagflation, which means low growth and high inflation — a recipe for misery, failure and decline,” Trump said at the World Economic Forum in Davos, Switzerland, in January.

The scoreboard tells a very different story, one that makes Biden’s record in 2024 look better than Trump’s performance last year. The US economy grew at a pace of 2.8% over the past year under Biden, compared to 2.2% under Trump in 2025.

As for inflation, the primary measure used by the Federal Reserve is the Personal Consumption Expenditures Price Index. It was 2.6% in 2024 and 2025.

Trump has staked his economic case on doing a better job than Biden. But while it avoided the spike in inflation that has dogged Biden’s presidency, it did not deliver stronger growth or more hiring.