The Economist projects that President Donald Trump’s 2026 policy mix will reduce income for the poorest tenth of U.S. households while raising it for the richest tenth, showing sharply uneven effects.
The model estimates a nearly 3% gain for the top tenth, whose average after-tax income is close to $500,000. For the poorest tenth, average income after taxes and transfers is about $37,000, and the projected loss is nearly 3%. The middle-income group, averaging about $100,000, is estimated to lose more than $400. These are modeled policy effects, not observed income changes.
The Economist’s calculation includes tariff and motor-fuel costs alongside the One Big Beautiful Bill Act, but leaves out the effect of expired enhanced Affordable Care Act subsidies. The Budget Lab at Yale estimates that current-law tariffs would raise the consumer price level by about 0.7%, with an annual cost of roughly $1,100 for the average household.
Pay and tax figures offer a mixed picture. The Bureau of Labor Statistics (BLS) reported that seasonally adjusted real average hourly earnings for all employees on private nonfarm payrolls fell 0.7% from September 2025 to September 2026, while nominal earnings rose 3%. By May 1, 2026, the Internal Revenue Service (IRS) reported an average tax refund of $3,273, up $326 from the comparable point in 2025. The IRS figure does not identify how much of the increase came from the tax law.
ACA Marketplace costs also increased. KFF found average monthly premium payments rose to $178 in 2026 from $113 in 2025; average deductibles climbed by $1,027 to $3,786.
A Center on Budget and Policy Priorities (CBPP) calculation using U.S. Department of Agriculture and state program data found that Supplemental Nutrition Assistance Program (SNAP) participation fell by 5.5 million people, or 13%, between July 2025 and July 2026. CBPP said participation had already begun declining before some law provisions took effect. It also cited a 13% drop from April 1997 to April 1998 after federal food-assistance cuts in 1996.
Public opinion has shifted as well. Pew Research Center found that 65% of 5,062 U.S. adults surveyed Sept. 28-Oct. 4 said Trump’s economic policies had made conditions worse. Among Republicans and Republican-leaning independents, 35% said the same, up from 18% in January.
The Bureau of Economic Analysis (BEA) is scheduled to release its advance estimate of third-quarter U.S. gross domestic product on Thursday, Oct. 29, at 8:30 a.m. ET.
