New economic data raises questions about Trump's promises to keep costs down.
Fox Business Admits Inflation Is Eating Away at Paychecks
A Fox Business correspondent gave her take on the U.S. economy after new government data showed inflation was climbing faster than worker paychecks. The data puts more pressure on President Donald Trump’s pledge to lower costs for Americans.
“Inflation is wiping out wages,” Lauren Simonetti said during an appearance on Varney & Company. She was reacting to new reports that showed that prices continued to rise faster than income growth.
She made her comments after two economic reports showed how consumers are already struggling with higher grocery bills, housing costs, and gasoline prices.
The personal consumption expenditures index rose 3.8%, the highest level in three years. Wage growth, however, increased only 3.6% during the same period, meaning many workers cannot buy the same things they previously could even though they are earning more money on paper.
To this, the economic slowdown has made the situation worse. An updated estimate from the Commerce Department showed that the first-quarter GDP growth slowed to 1.6%, which is down from the earlier one of 2.0% and below what Wall Street was expecting, reports Raw Story.
Inflation and consumer debt add pressure to Trump economy
Inflation is hitting Americans hard.
The latest numbers show how Americans are facing more financial strain in their day-to-day life.
The University of Michigan's Consumer Sentiment Index showed that consumer confidence dropped to a record low. 57% of the respondents said that rising prices were hurting their finances in May.
A separate survey from Debt.com found that more than half of U.S. adults are now using credit cards to pay for essentials such as groceries, rent and utility bills.
The nation’s personal savings rate also tells its own story. It has dropped to 4.0%, down from 6.2% at the start of 2024.
Gas prices have become another source of frustration for households who are now heading into the summer travel season. AAA data showed that the national average price for regular gasoline is the highest it's been in four years, with California prices reaching $6 per gallon in some areas.
Trump campaigned heavily on reducing costs for Americans and repeatedly promised voters he would tackle inflation quickly if he returned to office.
The latest data, however, suggests that many households are still feeling financial pressure.
Fox Business highlights growing cost-of-living concerns
The University of Michigan's consumer-sentiment index for April shows that consumer confidence has dropped.
Part of the reason Simonetti's remarks landed was because it was aired on Fox Business which is generally supports of Trump's economic policies.
Host Stuart Varney tried to soften the impact of the numbers during the segment, responding, “Not that bad,” before repeating the phrase a second time.
But, the data clearly showed the difference between wages and inflation which begs the question of whether wages can keep pace with rising living expenses.
And, the answer to that may be the fact that Americans are increasingly turning to their credit cards to cover basic living expenses even though borrowing costs remain high.
In the meantime, Trump recently made news headlines when a reporter asked him if America's financial situation was motivating him to secure a peace deal with Iran.
He replied, " "Not even a little bit. I don't think about the Americans' financial situation. I don't think about anybody. I think about one thing: We cannot let Iran have a nuclear weapon. That's all. That's the only thing that motivates me."