The engine that fueled the Biden economy is sputtering under Trump

American consumers – and their wallets – are the engine of the economy. But they’re now showing the strain of inflation, President Donald Trump’s tariffs and a stock market plunge.

American consumers – and their wallets – are the engine of the economy. But they’re now showing the strain of inflation, President Donald Trump’s tariffs and a stock market plunge. That’s a problem because consumer spending accounts for roughly 70% of the US economy. Consumers proved resilient throughout Joe Biden’s presidency. They powered through pandemic-driven inflation and the higher interest rates brought in to control it, thanks to a robust labor market and rising wages that helped buttress spending and drive the economy. Biden entered the White House in the depths of the pandemic and left office with strong economic growth, monthly job gains for the entirety of his presidency and the stock market at record highs. But he also presided over a steep rise in housing, child care and other household costs that contributed to Trump’s victory in 2024. The Trump administration has said it’s trying to “turn back the economic plague unleashed by the Biden Administration.” But American business leaders are now sounding the alarm about consumers freezing up, in part due to Trump’s policies. Consumer confidence last month registered its biggest monthly decline since 2021, according to the Conference Board’s Consumer Confidence Index. Airlines are warning that consumer demand for travel is slowing, and shoppers are buying less clothing, home decor and other goods.