President Donald Trump’s administration says the U.S. economy is finally beginning to recover from years of painful inflation, and new federal data shows Americans are getting some relief on prescription drugs, groceries, insurance and other household expenses.
Treasury Secretary Scott Bessent says Trump inherited a difficult economic situation but is now overseeing a turnaround that could gradually restore purchasing power for American families.
During an appearance Thursday on Newsmax’s “Rob Schmitt Tonight,” Bessent acknowledged that millions of Americans remain frustrated by the high cost of living.
His message, however, was that the economic picture is beginning to improve.
“People should be upset,” Bessent said while discussing the financial pressure families endured during the Biden years.
But he added that the Trump administration believes it has begun correcting the problem.
“We’ve applied the right medicine, and things are getting better slowly,” Bessent said.
And the latest inflation numbers provide the White House with some evidence to support that argument.
New Inflation Numbers Bring Encouraging News
The Bureau of Labor Statistics’ latest Consumer Price Index data put core inflation at 2.5% compared with the same period a year earlier.
Core inflation excludes food and energy prices, which tend to fluctuate more dramatically.
That 2.5% figure puts the measure considerably closer to the Federal Reserve’s 2% inflation target.
The broader Consumer Price Index increased 3.4% over the same 12-month period.
For families who have spent years watching the cost of groceries, housing, automobiles, insurance and medical care climb, slowing inflation could provide some welcome relief.
But there is an important distinction.
Lower inflation doesn’t necessarily mean prices return to their old levels. It means the pace at which prices are rising has slowed.
That’s one reason many Americans may still feel financially squeezed even as the economic statistics begin moving in a better direction.
Prescription Drug Prices Drop
One of the most eye-catching developments in the July inflation report involved prescription medication.
Prescription drug prices declined 0.8% during the month.
That’s particularly significant for older Americans and retirees, who can spend a substantial portion of their monthly budgets on health care and medication.
The Trump administration has made reducing prescription drug costs a prominent part of its economic agenda, and Bessent is pointing to falling prices as another indication that Americans could finally be starting to regain some purchasing power.
Other everyday expenses also moved lower.
Food-at-home prices, the government’s category covering groceries, declined 0.1% in July.
Motor vehicle insurance fell 0.3%.
Energy prices dropped 1.5% during the month.
Those declines could be particularly meaningful for middle-class households and retirees living on fixed incomes.
Americans Still Face High Energy Costs
Not every number was positive.
Energy prices remained 14.7% higher than they were one year earlier.
Food prices overall were also 3% higher over the previous 12 months.
That helps explain why many Americans aren’t celebrating yet.
A family balancing mortgage or rent payments, car insurance, utility bills, groceries and medical expenses doesn’t experience the economy as a government statistic.
They experience it through their monthly bills.
Bessent acknowledged that reality while arguing that repairing the damage from the inflation surge will take time.
He compared the economy inherited by Trump to an emergency-room patient who had been “backed over by a truck.”
The administration’s argument is essentially that the patient is recovering — but isn’t fully healed.
What Happened To Inflation Under Biden?
Inflation remains one of the biggest economic vulnerabilities Democrats carried out of the Biden administration.
When Trump completed his first term, core inflation was approximately 1.4%.
It later surged, with the core inflation rate reaching 6.6% in September 2022.
Americans didn’t need an economist to tell them something had changed.
Families saw it at grocery stores.
They saw it in housing costs.
They saw it when renewing automobile insurance.
And they saw it when shopping for cars, paying utility bills and trying to stretch retirement income.
Bessent has argued that aggressive federal spending during the Biden administration contributed to those inflationary pressures.
Whatever voters believe caused the inflation surge, the financial consequences were difficult to ignore.
Now Trump has the challenge of bringing inflation under control without undermining economic growth.
U.S. Economy Continues To Grow
There are encouraging signs beyond inflation.
The Congressional Budget Office expects real economic growth to strengthen in 2026, projecting 2.2% real GDP growth for the year.
Consumer spending and private investment are expected to play important roles in that expansion.
That matters because controlling inflation is only part of the economic equation.
Americans also need businesses investing, employers hiring and wages maintaining their purchasing power.
The administration wants to demonstrate that it can accomplish both goals: control prices while keeping the American economy growing.
There are risks.
The CBO has warned that economic growth could moderate in later years, meaning the White House will face continued pressure to prove its policies can deliver lasting improvements rather than a temporary boost.
Washington’s $1.9 Trillion Deficit Remains A Major Problem
Bessent also addressed another issue that has frustrated fiscal conservatives for decades: Washington’s massive federal deficit.
The Congressional Budget Office projects the federal government will run a roughly $1.9 trillion deficit in fiscal 2026, equal to approximately 5.8% of GDP.
Bessent says the Trump administration wants to push the deficit below 4% of GDP before the president leaves office.
That would require significant progress.
One area the administration believes could produce savings is federal fraud.
Government estimates have previously placed potential annual federal fraud losses in the hundreds of billions of dollars.
For taxpayers, that raises an obvious question: How much money could Washington save simply by preventing taxpayer dollars from being lost to fraud, improper payments and abuse?
Bessent believes the answer could be substantial.
But even aggressive anti-fraud efforts won’t eliminate Washington’s broader fiscal challenges. The federal government continues to face enormous spending obligations, growing interest costs and a national debt that remains a serious long-term concern.
The Real Test Comes At The Kitchen Table
Economic reports from Washington matter, but they aren’t ultimately how most Americans judge an economy.
The real test is much simpler.
Can Americans afford their lives again?
Can retirees fill their prescriptions without worrying about the bill?
Can families leave the grocery store without suffering sticker shock?
Can homeowners and drivers afford their insurance premiums?
Can workers see their paychecks stretch further instead of watching inflation consume every raise?
Those are the questions that could ultimately determine whether Americans believe Trump’s economic turnaround is real.
Bessent believes they will increasingly notice the difference.
“I’m very confident we are going to get to a good place,” he said.
And later, he offered an optimistic prediction about where the economy is headed.
“There is light at the end of the tunnel. Things are getting better.”
For Trump, the political stakes are enormous.
Democrats can debate his economic record, and Republicans can promote improving statistics. But neither side gets the final word.
American families do.
If inflation continues moving lower, prescription drug costs decline, household expenses stabilize and purchasing power improves, voters may begin to feel something that no political advertisement can manufacture:
More money left in their pockets at the end of the month.