Kevin Hassett, the director of President Donald Trump's National Economic Council, has dismissed the country's much-discussed affordability "crisis" as a "myth," arguing that official spending data proves Americans are significantly better off under the current administration. The president has repeatedly painted affordability as a "hoax" manufactured by political rivals to undermine his domestic agenda. Trump said on the first night of the Republican National Convention in September: "They use the word affordability, right?
They are so fake because it was them that caused the affordability—to use their word—crisis." While Democrats have seized on the issue—and voters' evident economic concerns—when campaigning in this year's elections, Hassett said the general idea of a crisis was "inconsistent with the data" on consumer spending, and that Americans are now "$1 trillion better off than when President Trump took office." "The amount of consumption per household has gone up maybe around $5,000 per household," he said in an interview with Fox Business on Monday. "That's after inflation, because of the income boom, the capital spending boom, the fact that people aren't losing their jobs. All the things that have made the economy great means that 'affordability crisis'—it's a myth!" Newsweek has contacted the White House for comment.
The topic arose after Kudlow host Larry Kudlow commented on the difficulty many across the country were facing due to elevated gas prices, though Hassett said these would "drop like a rock soon." According to AAA, the national average is $4.27 for a gallon of regular unleaded, up from about $3 prior to the start of the Iran war in late February. Rising energy costs have continued to drip into broader consumer price data. The latest report from the Bureau of Labor Statistics found that inflation accelerated to 3.7 percent in September from 3.4 percent the month prior, faster than analysts had forecast.
Nominal hourly earnings rose 0.1 percent during the month while prices increased 0.6 percent, resulting in an effective pay cut for Americans. Going by the Consumer Price Index, prices have risen roughly 6.1 percent since January 2025, but Hassett argues that because aggregate inflation-adjusted consumption has also increased—and at a faster pace—rising costs do not yet constitute a crisis for Americans. According to the Commerce Department, aggregate personal income has risen 7.3 percent over this period to $27.6 trillion, with spending rising 9.3 percent to $22.3 trillion.
But economists say looking at the figures in this manner neglects the economic reality for most voters in the U.S., with Mark Zandi, the chief economist at Moody's Analytics, calling affordability "a serious problem for the majority of Americans." "After inflation, wages are falling, personal saving rates are low, and borrowing costs are on the rise," he told Newsweek. "Overall spending has held up, but only because the well-to-do are doing fine financially, as their AI-powered stock prices have lifted their wealth." Research from Moody's in 2025 showed that the richest U.S. households represent a record portion of overall consumer spending—with the top 10 percent of earners now accounting for roughly half. Zandi added that most Americans own few if any equities and have been "locked out" of the real-estate market thanks to elevated mortgage rates.
David Wessel, a senior fellow in economic studies at Brookings, likewise told Newsweek that looking at aggregate figures ignores the situation for ordinary households, as "Elon Musk and Mark Zuckerberg have a lot of money and spend a lot," which "brings up the average." He pointed to research that the New York Fed published in May, which found that "in recent years, people with higher incomes have increased their spending more than those with lower incomes and the recent growth in retail spending has been mostly due to the high-income households." Wessel also cast doubt on Hassett's statement regarding gas prices, telling Newsweek: "I wonder how much money Kevin Hassett would bet that gasoline prices are going to drop like a rock. If the president could do that, why wouldn't he do it before the midterms." Despite what Hassett says is sufficient hard data dispelling any affordability crisis, soft data has consistently shown that cost-of-living concerns are weighing heavily on millions of Americans. In a September survey of 1,000 adults by the personal finance website the Penny Hoarder, 62 percent reported living paycheck to paycheck, up from 58 percent in 2025.
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