2026

In the past week, many Americans remained focused on the economy, inflation and how those forces could impact their lives. Trips to the grocery store or gas station are more painful than they were last year, and that is impacting the decisions of both households and businesses.

Here’s a snapshot of prominent economic data and news that occurred over the past week and what it potentially means for you.

U.S. consumer prices climbed sharply again last month as the 10-week war with Iran pushed energy prices higher.

The Labor Department’s consumer price index rose 3.8% from April 2025, according to data released Tuesday. On a month-to-month basis, April prices rose 0.6% from March as gasoline prices rose 5.4% during the month; the month-over-month gain was down from a 0.9% increase from February to March.

Labor Department figures showed that gasoline prices are up more than 28% compared to a year ago. AAA says the average gallon of gasoline costs motorists more than $4.50 a gallon, about 44% more than it cost last year at this time.

U.S. wholesale inflation came in hot last month. Producer prices rose 6% from a year earlier, the most since December 2022, as the 10-week Iran war pushed up energy prices and put pressure on companies to pass along higher costs to consumers.

The Labor Department reported Wednesday that its producer price index — which tracks inflation before it hits consumers — shot up 1.4% in April, the biggest monthly gain since March 2022.

Energy prices climbed 7.8% from March to April and 22.7% from a year earlier. Gasoline soared 15.6% from March and diesel, the dominant fuel used in shopping, jumped 12.6%.

Excluding volatile food and energy costs, so-called core producer prices were up 1% from March and 5.2% from April 2025.

All the numbers were much higher than economists had forecast.

The number of Americans filing for jobless aid rose last week but remains historically low despite the economic uncertainty caused by the war in Iran.

U.S. applications for unemployment benefits for the the week ending May 9 rose by 12,000 to 211,000, the Labor Department reported Thursday. That’s slightly more than the 207,000 new applications analysts surveyed by the data firm FactSet had forecast.

Weekly filings for unemployment benefits are considered a proxy for U.S. layoffs and are close to a real-time indicator of the health of the job market.

Despite relatively few layoffs, the labor market appears to be stuck in what economists call a “low-hire, low-fire” state. That has kept the unemployment rate low at 4.3%, but left many of those out of work struggling to find new employment.

Shoppers pulled back on spending in April as higher gas prices fueled by the Iran war meant less money left over for some nonessentials like clothing and furniture.

Retail sales rose a respectable 0.5% in April, but that was slower than the 1.6% growth seen in March, according to Commerce Department data released Thursday. March marked the largest one-month increase in retail spending in more than three years, largely because gas prices rose so rapidly.

Excluding gasoline, retail sales in April were up 0.3%. That’s less than half the 0.7% pace from the previous month, excluding gas station sales.

Sales of previously occupied U.S. homes were essentially flat in April, another lackluster showing for the housing market during what’s traditionally its busiest time of the year.

Existing home sales edged up 0.2% last month from March to a seasonally adjusted annual rate of 4.02 million units, the National Association of Realtors said Monday. Sales were unchanged compared to April last year.

The latest sales figure fell short of the roughly 4.12 million pace economists were expecting, according to FactSet.

Sales have been hovering close to a 4 million annual pace now going back to 2023, far short of the historic norm that is closer to 5.2 million.

The average long-term U.S. mortgage rate edged lower this week, its first drop after rising the previous two weeks.

The benchmark 30-year fixed rate mortgage rate fell to 6.36% from 6.37% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the rate averaged 6.81%.

Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. That average rate fell to 5.71% from 5.72% last week. A year ago, it was at 5.92%, Freddie Mac said.

The U.S. stock market was falling from its records Friday and joining a worldwide stock market drop as higher oil prices sent a shiver through the bond market. Stocks that had been caught up in the euphoria around artificial-intelligence technology that rose sharply for most of the week, led the decline Friday.

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Recent comments by U.S. President Donald Trump that arms sales to Taiwan are a “very good negotiating chip” in the United States’ dealings with China are heightening anxieties on the island democracy that Beijing claims as its own.

Trump made the comment in a Fox News interview with Bret Baier that aired right after the U.S. president wrapped up a high-stakes visit to China on Friday.

China sees Taiwan as a breakaway province, to be retaken by force if necessary. The U.S., like all countries that have formal ties with Beijing, doesn’t recognize Taiwan as a country but has been the island’s strongest backer and arms supplier.

Trump is now suggesting that is open to negotiation.

Asked if he would approve a $14 billion arms package to Taiwan that has been held up for months, Trump said that’s up to China.

“I’m holding that in abeyance and it depends on China,” he said. “It’s a very good negotiating chip for us, frankly. It’s a lot of weapons.”

The U.S. is bound by its own laws to provide Taiwan with the means to defend itself and sees all threats to the island as a matter of grave concern.

By conditioning U.S. arms sales to Taiwan on his negotiations with China, Trump may play into one the island’s “nightmare scenarios,” said William Yang, a Northeast Asia senior analyst for International Crisis Group: that Taiwan, instead of being at the negotiating table, is on the menu.

Although Trump didn’t say specifically what he would want from China in return for denying Taiwan the weapons, he has been pressing Beijing to buy more American goods and to help put pressure on Iran.

Trump and the U.S. Congress already approved in December a separate $11 billion arms sales package to Taiwan. Beijing reacted furiously by staging live fire drills around the island.

China has framed Taiwan as “the most important issue in China-U.S. relations” during Chinese President Xi Jinping’s recent summit with Trump. The visit is to be followed next week by a trip by Russian President Vladimir Putin to Beijing.

In one of his strongest statements to date, Xi on Thursday warned Trump of “clashes and even conflicts” if the issue of Taiwan is not handled properly.

Taiwan’s presidential office on Saturday sought to smooth over the tensions by highlighting “that the consistent U.S. policy and position toward Taiwan remain unchanged.”

“The Republic of China is a sovereign, independent, democratic country; this is self-evident, and Beijing’s claims are therefore without merit,” said Presidential Office Spokesperson Karen Kuo, referring to Taiwan’s official name. She added that the island remains grateful to Trump for his support and stressed that U.S. arms sales to Taiwan are stipulated by law.

Another statement that raised concerns on the island was Trump’s call for Taiwan’s microchip sector — the world’s largest and most advanced — to pick up and move to the U.S.

“I’d like to see everybody making chips over in Taiwan come into America,” Trump told Fox News, describing such a move as “the greatest thing you can do.”

Trump has long pressed Taiwanese chipmakers, which produce more than 90% of the world’s most advanced chips, which are used for artificial intelligence, smartphones and military equipment, to base some of their production in the U.S.

Taiwan’s leading chipmaker, TSMC, has committed an investment of $165 billion in a mega-campus in Arizona. The island’s government, in a sweeping trade agreement with the U.S. earlier this year, pledged $250 billion in investment in the U.S. microchip sector, which included TSMC’s previous commitment.

Trump also reiterated older accusations that Taiwan “stole” its chipmaking sector from the U.S. decades ago.

While Trump during his summit with Xi did not alter U.S. policy wording on Taiwan — which many observers had feared he would — he did seem to adopt some of the Chinese president’s own narrative about the island’s government.

Beijing has branded Taiwanese President Lai Ching-te as a “Taiwan independence diehard,” and warned that he would bring war and destruction to the island.

Trump and other top U.S. officials don’t usually communicate with Taiwanese leaders but have shown support in the past for example by allowing former Taiwanese President Tsai Ing-wen to transit on U.S. soil en route to visiting Latin American countries. Lai, who is about to reach his presidency’s two-year mark, has yet to set foot on the U.S. mainland, and some observers have interpreted that as a rollback of support by the Trump administration.

In his interview with Fox News, Trump stressed that he didn’t want to see a change of status quo between Taiwan and Beijing. “But they have somebody there now that wants to go independent,” he said, likely referring to Lai.

“They’re going independent because they want to get into a war and they figure they have the United States behind them.” He added that he is not looking to fight a war thousands of miles away.

Trump’s worrying statements about Taiwan may be another instance of “his transactional rhetoric being turned up to the max,” said Wen-Ti Sung, a fellow with the Atlantic Council. “What matters more is the substance, which Taiwan is holding its collective breath for.”

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WASHINGTON (AP) — President Donald Trump returned from the spectacle of a Chinese state visit to a less than welcoming U.S. economy — with the military band and garden tour in Beijing giving way to pressure over how to fix America’s escalating inflation rate.

Consumer inflation in the United States increased to 3.8% annually in April, higher than what he inherited as the Iran war and the Republican president’s own tariffs have pushed up prices. Inflation is now outpacing wage gains and effectively making workers poorer. The Cleveland Federal Reserve estimates that annual inflation could reach 4.2% in May as the war has kept oil and gasoline prices high.

Trump’s time with Chinese leader Xi Jinping appears unlikely to help the U.S. economy much, despite Trump’s claims of coming trade deals. The trip occurred as many people are voting in primaries leading into the November general election while having to absorb the rising costs of gasoline, groceries, utility bills, jewelry, women’s clothing, airplane tickets and delivery services. Democrats see the moment as a political opportunity.

“He’s returning to a dumpster fire,” said Lindsay Owens, executive director of Groundwork Collaborative, a liberal think tank focused on economic issues. “The president will not have the faith and confidence of the American people — the economy is their top issue and the president is saying, ‘You’re on your own.’”

The president’s trip to Beijing and his recent comments that indicated a tone-deafness to voters’ concerns about rising prices have suggested his focus is not on the American public and have undermined Republicans who had intended to campaign on last year’s tax cuts as helping families.

Trump described the trip as a victory, saying on social media that Xi “congratulated me on so many tremendous successes,” as the U.S. president has praised their relationship.

Trump told reporters that Boeing would be selling 200 aircraft — and maybe even 750 “if they do a good job” — to the Chinese. He said American farmers would be “very happy” because China would be “buying billions of dollars of soybeans.”

“We had an amazing time,” Trump said as he flew home on Air Force One, and told Fox News’ Bret Baier in an interview that gasoline prices were just some “short-term pain” and would “drop like a rock” once the war ends.

Trump departed from the White House for China by saying the negotiations over the Iran war depended on stopping Tehran from developing nuclear weapons. “I don’t think about Americans’ financial situation. I don’t think about anybody. I think about one thing: We cannot let Iran have a nuclear weapon,” Trump said.

That remark prompted blowback because it suggested to some that Trump cared more about challenging Iran than fighting inflation at home. Trump defended his words, telling Fox News: “That’s a perfect statement. I’d make it again.”

The White House has since stressed that Trump is focused on inflation.

Asked later about the president’s words, Vice President JD Vance said there had been a “misrepresentation” of the remarks. White House spokesman Kush Desai said the “administration remains laser-focused on delivering growth and affordability on the homefront” while indicating actions would be taken on grocery prices.

But as Trump appeared alongside Xi, new reports back home showed inflation rising for businesses and interest rates climbing on U.S. government debt.

His comments that Boeing would sell 200 jets to China caused the company’s stock price to fall because investors had expected a larger number. There was little concrete information offered about any trade agreements reached during the summit, including Chinese purchases of U.S. exports such as liquefied natural gas and beef.

“Foreign policy wins can matter politically, but only if voters feel stability and affordability in their daily lives,” said Brittany Martinez, a former Republican congressional aide who is the executive director of Principles First, a center-right advocacy group focused on democracy issues.

“Midterms are almost always a referendum on cost of living and public frustration, and Republicans are not immune from the same inflation and affordability pressures that hurt Democrats in recent cycles,” she added.

Democratic lawmakers are seizing on Trump’s comments before his trip as proof of his indifference to lowering costs. There is potential staying power of his remarks as Americans head into Memorial Day weekend facing rising prices for the hamburgers and hot dogs to be grilled.

“What Americans do not see is any sympathy, any support, or any plan from Trump and congressional Republicans to lower costs – in fact, they see the opposite,” Senate Democratic leader Chuck Schumer of New York said Thursday.

Vance faulted the Biden administration for the inflation problem even though the inflation rate is now higher than it was when Trump returned to the White House in January 2025 with a specific mandate to fix it.

“The inflation number last month was not great,” Vance said Wednesday, but he then stressed, “We’re not seeing anything like what we saw under the Biden administration.”

Inflation peaked at 9.1% in June 2022 under Biden, a Democrat. By the time Trump took the oath of office, it was a far more modest 3%.

The data tells a different story as higher inflation is spreading into the cost of servicing the national debt.

Over the past week, the interest rate charged on 10-year U.S. government debt jumped from 4.36% to 4.6%, an increase that implies higher costs for auto loans and mortgages.

“My fear is that the layers of supply shocks that are affecting the U.S. economy will only further feed into inflationary pressures,” said Gregory Daco, chief economist at EY-Parthenon.

Daco noted that last year’s tariff increases were now translating into higher clothing prices. With the Supreme Court ruling against Trump’s ability to impose tariffs by declaring an economic emergency, his administration is preparing a new set of import taxes for this summer.

Daco stressed that there have been a series of supply shocks. First, tariffs cut into the supply of imports. In addition, Trump’s immigration crackdown cut into the supply of foreign-born workers. Now, the effective closure of the Strait of Hormuz has cut off the vital waterway used to ship 20% of global oil supplies.

“We’re seeing an erosion of growth,” Daco said.

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