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With less than a week to go before President Donald Trump‘s first State of the Union address of his second presidential term, the White House is quietly preparing its war footing. During a private meeting at the Capitol Hill Club, White House chief of staff Susie Wiles coalesced scores of senior staffers alongside Cabinet members to be briefed by pollster Tony Fabrizio on messaging for the 2026 elections. The thesis of Fabrizio’s warning, that the economy and cost of living, but specifically healthcare and housing prices, will determine 2026, is unsurprising for anyone who has followed Tiana’s Take in the Washington Examiner magazine. But the fact that Trump seems to be taking the warning signs far more seriously than former President Joe Biden ever did is less expected and better news for Republicans.
The fascinating feature about the economy’s salience as an electoral issue is that almost all boring bean counters agree: the economy, by the numbers, is actually doing quite well. The political nut for the president’s team to crack is understanding why the disconnect has only deepened between the raw economic data and how negatively voters feel about the economy.
REAL WAGES UP 1.9% IN TRUMP’S FIRST YEAR BACK IN OFFICE
On the one hand, Trump inherited the worst inflationary crisis in nearly half a century and, within one year, is on the cusp of accomplishing the first indisputable soft landing in postwar history. To recap, the unemployment rate is humming along near historic lows at 4.3%, and while inflation remains above its 2% maximum target, consumer price index inflation, which was at 3% by the end of Biden’s presidency, fell to 2.4% in January. Core CPI inflation, which was at 3.3%, has fallen to 2.5%, its lowest point since Biden lit the economy on fire by signing his cynically named “American Rescue Plan” into law. Economic growth is running north of 4% while productivity growth, the secret sauce to maintain economic expansion with an aging and shrinking labor force, is closer to 5%. And real average weekly wages, which fell nearly 4% throughout Biden’s term, are already up 1.9% in just the first year of Trump 2.0.
And voters still are not happy.
The gold standard of consumer sentiment, the University of Michigan index, is as low today as it was when inflation broached the double digits under Biden. Trump’s economic approval rating, historically his strongest asset, is 15 percentage points underwater per the RealClearPolitics polling average. There is some decent evidence that Trump has rebounded from the nadirs of last year’s government shutdown. Since the end of 2025, his economic approval rating has slightly rebounded by 3 points in Fox News’s polling, 10 points in Marquette University’s, and 2 points in Morning Consult’s.
But the problem for the president is that this isn’t just a case of “Trump derangement syndrome.” Rather, only one-fifth of independents polled by Navigator Research say the economy is in good shape, and one-third say they feel confident about their own personal finances. It’s one thing for Democrats to give Trump a failing grade on the economy because it’s a day ending in “y.” It’s entirely another for independents to rate their own personal experiences with the economy nearly as poorly as they rate Trump’s performance on the matter.
So why the dissonance? The most likely explanation is not that the Bureau of Labor Statistics is lying. While the BLS has publicly admitted that lackluster survey response rates and the intermittent government shutdowns could impede the precision of its employment and inflation data, that is very different from thousands of career experts intentionally manipulating millions of minute data points to rig favorable numbers for Trump.
You don’t need to take my word for it. Trust Erika McEntarfer, the former commissioner of labor statistics, who still maintains we ought to trust the integrity of BLS data even after Trump fired her.
It also seems improbable that the same 10%-20% of people who previously approved of Trump’s economic performance but now do not are blindly partisan against the president. Instead, two things are true at once: The economy and consumer prices are, broadly speaking, doing well, but prices remain so punishingly high in a handful of specific but crucial industries that for a nontrivial slice of consumers, lower energy costs and stabilized grocery prices aren’t enough to make the economy feel affordable.
In a New York Times poll last month, 7 in 10 voters conceded that groceries, food, utilities, and transportation are affordable, but the majority said housing and education are not. Nearly half said that healthcare and having a family are unaffordable.
The obvious conclusion to take from this data is that the markets with the most government regulation are also the most expensive. But almost as important is how three of the four “unaffordable” industries are entirely irrelevant to seniors and of crushing salience to parents and young people.
The generational disconnect is borne out in the data. Two in 5 voters younger than 45 polled by the New York Times said they feel like they’re falling behind financially, compared to nearly 3 in 4 seniors who said they’re either holding steady or getting ahead. When asked whether respondents felt like they could afford “the life you feel like you should be able to afford, such as the home, family, or car you want,” fewer than one-quarter of Gen Z respondents and 2 in 5 millennials said they felt like they can currently afford it, compared to two-thirds of seniors.
The number of seniors who worry about “nothing” outweighs the total number of those concerned with housing, retirement, and basic necessities — combined. And whereas 7 in 10 seniors said they already own the home they want, a majority of Gen Z voters say they do not own a home they’d like, and that home ownership itself seems out of reach.
I have expounded at length on the ways that state and local zoning regulations have artificially manufactured the housing shortage that has driven prices to crisis levels, as well as how the federal government and Federal Reserve have encouraged housing to blow up into a speculative asset bubble. To recap a handful of statistics:
— Half as much housing was built in the 2010s as during the stagflationary hellhole of the 1970s, resulting in a housing shortage that congressional Republicans estimate amounts to 20 million missing housing units.
— The National Association of Home Builders estimates that a quarter of the cost of a single-family home is just a regulatory tax from local, state, and federal governments, amounting to an average tax of $94,000 per home, artificially jacking up the cost of creating new homes.
— Democratic local governments compound the crisis, as the census found that states with Republican governors issued almost 30% new housing permits per capita than states with Democratic governors in 2024.
— Because mortgage rates are back at historical averages after being artificially lowered for so long, the American dream of achieving home ownership has become a game of musical chairs in which current owners will hold onto their homes for dear life until the music starts again.
With all of this data in mind, we can more clearly see that it’s not as though the broad breadth of “people” are mad about “the economy” overall, but rather that young people are, not unjustifiably, furious about the specific industries of housing and, less importantly, healthcare, education, and child care.
TRUMP MUST REJECT HOUSING SOCIALISM OR FACE BACKLASH AT THE BALLOT BOX
It would be more useful to see not just economic approval based on voter age, but also based on home ownership status. I suspect that the chasm would be even greater than the boomer-zoomer disconnect for one simple reason: Even if you finance your home ownership with a mortgage, once you pay that 20% down payment, your effective inflation rate on monthly shelter payments is zero. If you are locked out of home ownership, you have faced average rent increases ranging between 3% and 9% over the last half-decade.
The lying fake news media notwithstanding, Trump doesn’t have an economic publicity problem, as voters seem to understand that consumer prices have come under control. The crisis is the reality of prohibitive home prices caused by government constraints on supply, and any affordability ploy that focuses on the style of the White House’s messaging over the substance is one that is doomed to a deserved failure.