Former Trump adviser rates U.S. economy a B amid soaring gas prices

Stephen Moore’s B grade assessment

On a recent episode of The Takeout, former Trump economic adviser Stephen Moore assigned the United States a B grade. He argued that the labor market remains resilient, yet he cautioned that rising gasoline costs and mortgage rates are creating headwinds for consumers.

Key factors behind the grade

Moore highlighted three primary drivers of his assessment:

• Steady job growth and low unemployment.
• Consumer price pressures, especially at the pump.
• Mortgage rates climbing to levels not seen this year.

He noted that while the job market continues to add jobs, the cost of living is eroding real wages.

Labor market strength

According to the latest Bureau of Labor Statistics employment report, the unemployment rate hovered around 3.7 percent in August 2026. Job creation has averaged about 200,000 positions per month for the past quarter, a pace that exceeds the long‑term trend.

Moore emphasized that this level of employment provides a solid foundation for economic stability. He said, "When people have jobs, confidence rises, and that fuels spending and investment."

Wage growth versus inflation

Despite solid hiring, real wage growth has lagged behind price increases. The Federal Reserve monetary policy page reports that inflation remains above the central bank’s 2 percent target, driven largely by energy costs.

Moore warned that if wages do not keep pace, households may cut discretionary spending, which could slow the recovery.

Gasoline prices above $4 per gallon

Gasoline prices have risen above four dollars per gallon in many parts of the country, according to the EPA gasoline price data. This marks a significant increase from the same period last year.

Higher fuel costs affect not only drivers but also businesses that rely on transportation. Moore pointed out that logistics firms are seeing tighter margins, which could translate into higher prices for goods.

Impact on consumer sentiment

Recent surveys show a dip in consumer confidence, with respondents citing fuel costs as a primary concern. Moore suggested that sustained high gasoline prices could dampen the optimism generated by strong employment figures.

Mortgage rates reach new highs for 2026

Mortgage rates have climbed to 7.2 percent for a 30‑year fixed loan, the highest level recorded this year, as reported by CNN’s 2026 mortgage rates coverage. This rise is tied to the Federal Reserve’s efforts to curb inflation.

Higher borrowing costs are slowing home sales and putting pressure on existing homeowners who consider refinancing.

Housing market implications

Homebuilders have reported a slowdown in new construction permits. The combination of high rates and elevated fuel prices creates a double burden for prospective buyers, potentially postponing purchases until rates retreat.

Political backdrop: Midterm elections

With the midterm elections looming, policymakers are under pressure to address the cost of living concerns. Moore noted that legislators may face a difficult balancing act: supporting measures that lower energy costs while maintaining fiscal discipline.

He added, "Voters will judge incumbents on how they handle inflation, especially at the pump and in the housing market."

Potential policy responses

Analysts suggest several avenues that could ease pressure:

1. Strategic fuel reserves releases to temper gasoline spikes.
2. Targeted tax credits for low‑income households.
3. Incentives for renewable energy adoption to reduce long‑term dependence on oil.

Each option carries trade‑offs, and the political climate will shape which measures move forward.

Moore’s outlook for the remainder of 2026

Looking ahead, Moore projects that the economy will maintain its B grade if job growth continues and inflation gradually eases. He warned, however, that any prolonged surge in gasoline prices or a further rise in mortgage rates could push the grade lower.

He concluded, "The fundamentals are solid, but the cost pressures we see today are real. Policymakers need to act decisively to keep the economy on a stable path."

As voters prepare to head to the polls, the interplay between economic data and political decisions will likely shape the nation’s trajectory for months to come.