Kevin Hassett, the director of the US National Economic Council, said trade negotiations between the United States and Canada are gaining speed, suggesting that the two neighbors may be moving closer to putting their dispute behind them. The comments come at a sensitive moment for the administration, which is working to close out a trade standoff with one of its largest trading partners — a relationship that involves hundreds of billions of dollars in annual two-way commerce — while reassuring voters about the direction of the economy.

Hassett defended President Donald Trump's management of the US economy on Sunday, just as Republicans begin their final efforts to appeal to voters ahead of the midterm elections, which will determine control of Congress. During an interview on Fox News, he argued that the overall numbers tell a much better story than complaints about living costs suggest. The problem for the White House is that people do not pay their bills with GDP figures.

Strong growth on paper, but everyday prices tell another story

"So the great big picture about the economy is that it's about the best economy we've ever seen," Hassett said.

He pointed to economic growth of 3% to 4% per year, low unemployment, and industrial output at its highest level since the pandemic as evidence of strength. The American economy is also growing faster than the economies of other G7 countries. None of these metrics, however, give any indication of how much a trip to the supermarket costs this week.

Even by his own account, though, parts of the economy still need work. "Now, I'm there are going to be pockets that need some repairs or that, hopefully, as President Trump said, energy prices will drop like a rock, then the 3 or 4 percent growth that we have right now will go even higher," he added.

Inflation has recently moved in the wrong direction. The annual consumer price index rose from 3.4% in August to 3.7% in September — a level well above the Federal Reserve's 2% inflation target — while food inflation reached 4.4%, up from 3.5% under the previous administration.

Grocery prices have become one of the most visible signs of the pressure on household budgets. Coffee prices have increased by 22%, ground beef prices have climbed by 25%, and cereals and baked products have gone up by 3.7%. According to an analysis by The Telegraph, a family of four is now spending an extra $23.84 each month.

The squeeze is not limited to food. The average American household now spends $77 more each month on fuel than it did in February. And for someone buying a house in October with a 20% down payment, the yearly cost of a 30-year fixed-rate mortgage is about $1,866 higher than it was before the Iran war.

So far during Trump's administration, the inflation rate has been 5.4%, compared with just 3.8% during the last 20 months of the Biden administration.

Iran war keeps gasoline expensive as midterm voters grow frustrated

The war with Iran has made energy a particularly sensitive political issue. Iran's effective shutdown of the Strait of Hormuz, the narrow waterway between Iran and the Arabian Peninsula that is used for roughly 20% of global oil exports, has unsettled supplies and helped keep prices elevated.

The price of gasoline on Sunday stood at $4.29 per gallon, according to AAA. That is down 20 cents from a month ago, and prices have been fairly stable over the past several weeks. Nevertheless, the figure remains far above the $3.06 average recorded a year earlier.

Trump has repeatedly said gasoline prices should fall after the United States wins the conflict. At a Saturday rally in Perry, Georgia, where he campaigned for Republican Senate nominee Mike Collins and gubernatorial nominee Rick Jackson, he addressed criticism surrounding fuel costs directly.

"I can just see the fake headlines. 'President Trump is talking about all the money they're making while people are suffering at the pump.' I don't give a damn. We're making a freaking fortune," Trump said.

That message, however, comes alongside some difficult polling numbers. According to a Financial Times/Focaldata poll conducted earlier this month, roughly a quarter of those surveyed approve of Trump's handling of the economy. Even fewer — two out of ten people — approve of his handling of inflation. The figures underline the challenge facing the president's party as it heads into the midterms.

Meanwhile, a Siena University/New York Times poll released on Tuesday shows 36% of voting adults approve of Trump's job performance, versus 59% who do not. As the November vote approaches, upcoming inflation readings and the outcome of the Canada negotiations are likely to remain central to the economic debate.

Source: Cryptopolitan