New figures predict next economic crisis imminent — with ‘serious risk to GOP’: report
Republicans are facing their next crisis after getting thrashed in elections last week — voters are seeing slow growth in their paychecks, making President Donald Trump's blindspot on affordability more startling and creating a larger problem for the GOP ahead of midterms.
Americans are feeling pessimistic over their economic futures and concerned over their own financial health, Politico reports Tuesday.
Economists also predict mass layoffs, climbing unemployment, a dip in job opportunities and hesitation among employers to hire new workers and potentially offer raises for current employees.
As wage growth has fallen and inflation rises, it's hitting lower- and middle-income families even harder since the beginning of 2025, according to the Bank of America Institute. These are the slowest rates of income growth seen since the early 2010s, when the economy was bouncing back from the Great Recession (2007-2009) and the unemployment rate was nearly double what it is now.
“We’re clearly going through a soft patch now,” Gary Schlossberg, an economist and global strategist for the Wells Fargo Investment Institute, told Politico. “Households are going to be feeling some pain. [And] if you’re focused on the trajectory of wage inflation, I think it will be slower next year.”
This presents a "serious risk to Republicans" and exposes the weak point the GOP will face in 2026 as they refine their approach and message to address economic woes for Americans.
And while Trump claims inflation is declining, voters don't agree. Since his second term, he is losing the historic advantage he previously had over Democrats, Politico reported.
Only 34% of voters approve of the president's handling of the economy, according to a recent Reuters/Ipsos poll. This figure matches President Joe Biden's polling results during the end of his administration.
Although Trump's administration has argued he will shift his attention to the economy — even offering potential $2,000 checks for low and middle income Americans with tariff revenue — he's also attempting to lower drug prices and suggesting that 50-year mortgages could help reduce costs for people each month.
Tax cuts promised by the Trump administration could bring some relief, but it's expected that those cuts will help the wealthy and give them better purchasing power.
It still won't change that inflation is rising or how Trump's aggressive immigration crackdown could hit wage growth for lower-income jobs often done by immigrants, Recruitonomics Chief Economist Andrew Flowers told Politico.
The reality is that inflation is “worse today than it was at the start of the year, or a year ago,” Flowers argues.
