WASHINGTON, D.C. – August 12 2025.– White House Press Secretary Karoline Leavitt presented a rosy picture of the U.S. economy during a briefing, emphasizing low inflation and rising wages as hallmarks of President Donald Trump’s economic policies. However, the narrative is set against a backdrop of potential inflationary pressures from Trump’s tariffs, which some economists warn could escalate by year-end.
Leavitt pointed to several positive indicators, including a nearly 10% drop in gasoline prices and a 2.5% decline in propane costs over the past year, as evidence of falling prices for everyday goods. She also noted a 20% reduction in egg prices since Trump assumed office and highlighted that shelter inflation has reached its lowest level since October 2021. These developments, she argued, demonstrate the administration’s success in managing economic stability.
Central to Leavitt’s message was the claim that wage growth is outpacing inflation, with American real wages increasing by 1.3% over the last year and continuing to rise monthly since Trump’s inauguration. Additionally, small business optimism has surged to a five-month high, reflecting confidence in the economic environment shaped by Trump’s policies.
Yet, this optimistic outlook is not without contention. Economists have raised concerns that Trump’s tariffs, announced in July and affecting over 60 countries, could stoke inflation. The non-partisan Peterson Institute for International Economics estimates that these tariffs might lower American incomes, with the poorest fifth of the population potentially facing a 4% reduction, compared to 2% for the wealthiest. Some projections suggest inflation could climb to 3.2–3.8% by the end of 2025, challenging the administration’s assertion of consistently low inflation.
The briefing’s timing coincides with other administration highlights, such as the recent peace declaration between Armenia and Azerbaijan, which the U.S. State Department has framed as a diplomatic triumph for Trump, potentially bolstering his image as a global leader. This dual focus on domestic economic achievements and international diplomacy aims to reinforce the narrative of Trump’s effectiveness across multiple fronts.
As the U.S. navigates these economic and geopolitical landscapes, the coming months will be critical in determining whether the administration’s policies can sustain the touted gains or if the warned inflationary pressures will materialize, impacting American households and businesses alike.