The German Economic Institute (IW) has assessed the economic policy Donald Trump has pursued since January 2025 and found a mixed record. The analysis was published ahead of the midterm elections on Tuesday and weighs the administration’s claims against the data.
The institute says U.S. GDP growth has been robust, with third-quarter growth at 3.4 percent. Job creation has been slower. The IW put the number of jobs added last year at about 120,000, against 2 million jobs in 2024.
Inflation and household budgets
Inflation has stayed above the Fed’s 2 percent target for more than five years and has at times outpaced household income growth. Personal income rose 0.2 percent last month, but real disposable income fell 0.3 percent in September, according to the Bureau of Economic Analysis.
The personal saving rate dropped to 3.8 percent, its lowest since October 2022. The IW said the cost of living now dominates the electoral landscape. Our own data shows U.S. annual inflation at 3.7 percent in September.
Investment and trade promises
Trump imposed import taxes, known as tariffs, to attract foreign direct investment. FDI nonetheless fell 8.2 percent in 2025 to 248 billion U.S. dollars, and was 18 percent below the 2015-2024 average, the IW found.
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The institute also noted that the monthly goods trade deficit stood at 130 billion dollars in August.
Labour market strains
The unemployment rate has ranged between 4.1 and 4.3 percent this year. Long-term unemployment reached 27 percent in September, against roughly 18 percent in 2023, while the labour force participation rate slipped to 61.8 percent from 62.6 percent in January 2025.
Democratic Rep. Suzan DelBene, chair of the Democratic Congressional Campaign Committee, said folks were struggling with high costs for housing, food and health care.
Source: US Bureau of Economic Analysis · German Economic Institute | Data: FRED — St. Louis Fed
