Trump carries on as if the numbers don’t concern him — but they do. He just needs to reach the threshold that even he recognizes as a tipping point
The American war against Iran, which is flaring up again, already has tangible, documented economic consequences — visible above all in the sudden jump in inflation to 4.2%.
The question we’ll pose today — when we look at the relevant numbers — is this: which parameters have to align, in the context of inflation, fuel prices, political support (or the lack of it), and other factors, for a “reversal” to take place in America, whether in the form of an escalation of anti-government protests or a revolt of the Republican elite against a president who is leading them deep into defeat?
Let’s start with the data.
American consumer prices rose 4.2% year-on-year in May, after 3.8% in April. On a monthly basis, prices rose 0.5%. More importantly: energy accounted for more than 60% of the total monthly rise in prices. Energy prices rose 3.9% in May alone, after 3.8% in April and a full 10.9% in March. Gasoline rose 7% in May compared with April, and a full 40.5% compared with a year earlier. Energy overall is 23.5% more expensive than a year ago.
This is the first serious domestic economic blow of Trump’s war. The most sensitive part of the American economy has begun to feel it precisely where it is politically most dangerous: in everyday spending.
Gasoline is the politically most dangerous price in America. It needs no explaining to anyone. Every driver sees its price several times a week. The national average for a gallon of regular gasoline on June 10 came to $4.151. That is somewhat below the May peaks, but still far above pre-war levels, when the average ran below $3.
The White House can claim this is a temporary shock. But for a household that has to drive to work, take a child to school, and buy groceries in a suburb without serious public transit, “temporariness” is a luxury word. The price of gasoline does not hit a Manhattan investment banker and a Texas warehouse worker equally. For lower- and middle-income households, energy is a condition of life.
That is why the data on real wages is especially important. The average hourly wage in the US rose 0.3% nominally in May, but inflation ate up that increase. Compared with May of last year, the real average hourly wage of all employees fell 0.7%. For production and non-supervisory workers — that is, for the vast majority of workers outside managerial layers — the real hourly wage fell 0.8% year-on-year.
So prices are rising faster than wages. The worker gets more dollars, but less life.
This is not yet a full-blown inflationary spiral. Core inflation, excluding food and energy, stood at 2.9% year-on-year. That means the war shock has not yet fully spread through the entire system. But problems are already visible. Food is 3.1% more expensive than a year ago. Rents and housing costs continue to rise. Airline tickets rose 2.7% in May. Clothing is 4.8% more expensive than a year ago.
Inflation forecast: if the war doesn’t calm down
If the situation in the Middle East and the Persian Gulf does not calm down by the congressional elections in November, American inflation could very easily move from the current 4.2% into the zone of 5% to 6%. That would be a scenario in which the war drags on, the price of oil remains elevated, Hormuz operates under a restricted regime, and expensive gasoline gradually spills over into transport, food, airline tickets, and everyday services. In that case, by the elections Trump would have a problem not only with the war but with inflation that is very visibly drifting away from the Federal Reserve’s target. With greater military escalation, the range becomes wider. If there were new strikes on energy infrastructure, a spread of the conflict to American bases, attacks on tankers, or a new insurance shock in maritime traffic, inflation could enter the zone of 7% to 8% by autumn — and even higher in a shorter shock. That would not mean a return of the full inflationary wave of 2022, but it would be enough for American households to begin feeling the war as everyday impoverishment.
That deterioration is visible not only in prices but also in the mood of American households. The University of Michigan publishes a monthly index of consumer sentiment, which does not directly measure how many people are dissatisfied, but how households assess their own finances, purchasing power, and the country’s economic future. That index fell in May to 44.8, after 49.8 in April — to a level lower than the crisis trough of June 2022. Even more important is that 57% of respondents said high prices are eroding their personal finances, whereas a month earlier 50% said so. Expectations worsened most among lower-income households and people without a college degree — that is, precisely those who spend the largest share of their income on fuel, food, rent, and other basic needs.
Forecast: the point of the first unrest
At the current 4.2%, America is already in a zone of political discomfort. People are not yet taking to the streets over inflation alone, but they are starting to change their behavior, cut spending, and look for someone to blame in the government. The first serious risk zone begins somewhere around 5% to 6% inflation, especially if that increase comes from gasoline, food, rents, and utilities. That is the level at which the war can no longer be presented merely as a foreign-policy problem, because households begin to feel it as everyday impoverishment. At that point larger protests, strikes, union pressure, local revolts against fuel prices, anger toward the administration, and more explosive political rallies become more likely. The zone of real social escalation begins if inflation moves toward 7% or 8%, while gasoline stays above the psychologically important threshold of $5 per gallon across much of the country. If you add to that new military escalation, more expensive credit, a stock-market drop, layoffs, or visible supply disruptions, the discontent could turn into local unrest.
Trump’s war in the Middle East is already being felt in the lives of ordinary Americans, and in the coming months that pressure will probably be even stronger. The trend already confirms it. And June is passing quickly, while the American congressional elections come in November. Trump continues to oscillate between “we’re on the verge of a deal” and “we’re on the verge of escalation,” and in that tone he could head into elections that, if they turn into bad news for the Republicans, will mark the rest of his term.
But the question is whether Trump will even be allowed to come that close to such a scenario. Because he can cope with Democratic opposition, protests, and media criticism, but he can far less easily cope with Republican congressmen concluding that Iran, gasoline, and inflation are leading them to defeat in November. That could be the red line. Reuters already reports that voter support for Trump is at a low 35%, that only 22% of Americans approve of his handling of the cost of living, that 59% expect gasoline prices to rise, and that voters would currently rather elect Democrats than Republicans for Congress, 41% to 37%.
Forecasts are thankless, and it is impossible to claim there are “definitive numbers” that represent a political reversal. But, bearing all of the above in mind, we can try. The tipping point would look roughly like this: inflation toward 6% or higher, gasoline around $5 per gallon, overall support for Trump falling toward 30%, economic approval going below 20%.
Trump is heading toward that. If he continues the war, these numbers will catch up with him. Of course, the situation changes dramatically if, in the meantime, the war escalates to the point where Washington opts for a ground invasion. In that scenario, more numerous American casualties come into play, and that sharply accelerates the “collapse in the numbers.”
About the Author
Mario Hoffmann is an independent analyst and writer covering global economics, geopolitics, and international affairs. With a background in history and politics, he writes for EconoPuls to provide in-depth context on the stories shaping our world.
