Despite all the naysayers who predicted doom and gloom for the Trump economy, the latest round of data has vindicated the President’s strategy. Indeed, it shows the stage is set for an American comeback. From family finances to federal finance, the damage of the Biden years is finally being reversed.
When the economy reopened after Covid, millions of people who were forbidden by the government from working returned to their jobs. While this was simply a return to the status quo, it was billed as job growth. Regardless, monthly job increases for the private sector peaked in the summer of 2021 and then began declining.
By the time Biden finally left office in January 2025, the private sector wasn’t adding any jobs at all. In fact, it was losing them—but the government was still on a hiring spree. All those extra federal bureaucrats made the jobs numbers better, but did nothing for the productive real economy in the private sector.
Just one year later, the Trump administration has successfully managed to right the ship. In January 2026, the private sector added 172,000 jobs while government jobs declined by 42,000. Astonishingly, Donald Trump reduced the federal bureaucracy by 323,000 in just one year—a reduction of more than a 10%!
Just as notable is who is getting those jobs. For nearly all of Joe Biden’s last year in office, the annual change in jobs among native-born Americans was negative, meaning this group was losing ground. Annual job growth was going to foreign-born workers. Once again, Trump has course-corrected.
During his first year back in office, employment among native-born Americans increased by 840,000 while the number of foreign-born workers with jobs declined. If that’s not “America First,” nothing is.
American workers are getting paid more too. Not only that, but their pay is going further—another sharp contrast to the Biden years, when the average American’s weekly paycheck grew substantially but still bought about 4% less by the time Biden left office.
Runaway inflation, which was ultimately caused by Biden’s blowout spending, is what eroded the purchasing power of Americans’ incomes, turning higher wages into lower standards of living. Conversely, inflation has been much milder under Trump, at just 2.4% during his first year as measured by the consumer price index (CPI).
Even better, when outliers are removed from the CPI, the inflation level drops to the lowest level since 2021. The core CPI, which excludes volatile food and energy, as well as median CPI and trimmed-mean CPI, which exclude the largest and smallest price increases (or decreases), have all fallen to near five-year lows. Meanwhile, the real-time price aggregator Truflation shows inflation today is even lower, now under 1%.
That’s not to say everything is sunshine and rainbows when it comes to consumer prices and affordability. Inflation is the rate of increase in prices, not prices themselves, which are still high. But it took four years for Biden to create an affordability crisis, so it will take some time for Trump to dig America out of this hole.
For example, while the average American’s inflation-adjusted weekly paycheck shrank about 4% under Biden, it’s grown about 2% under Trump. While it’s great that half the losses under Biden have been recouped in the last year, Americans still haven’t regained all their lost ground in terms of what their incomes can buy.
Even more striking is housing affordability. Under Biden, the monthly mortgage payment on a median price home doubled, rising over 100%. Since Trump was inaugurated, it has declined 8% while incomes have risen. That’s making homes more affordable, but the damage from the Biden years remains.
It’s the same story with federal finance. The deficit for the current fiscal year to date (October through January) is down 17% from the same months in the prior fiscal year, which were also Biden’s last four months in office. While a deficit of almost $700 billion in just four months is far too large, Trump and Treasury Secretary Scott Bessent have made remarkable progress in reducing it.
In short, just about everything is headed in the right direction. Family and federal finances alike are both improving and would recover even faster if Congress did its job and cut more spending. That would really help clean up more of Biden’s mess.
E.J. Antoni, Ph.D., is chief economist and the Richard Aster fellow at the Heritage Foundation and a senior fellow at Unleash Prosperity.