With fuel costs soaring, Trump insists the economy is strong.

“The consumer is really, really firing on all cylinders,” Kevin Hassett, the director of the White House National Economic Council, said on Wednesday.

Mr. Hassett, who spoke on Fox Business, pointed to credit card data, which he said showed that consumers’ finances remained strong even with high fuel costs. He said they were “spending more on gasoline, but they’re spending more on everything else, too.”

He argued that companies had also fared well, pointing to a strong earnings season that has helped to fuel a rally in financial markets that continued into Thursday.

Turning to the labor market, Mr. Hassett said it was “really hard to see having the unemployment rate go up,” before offering a glowing prediction of the jobs report due Friday.

“I think a very healthy, steady jobs picture is what we’re going to see,” he said, adding that the number of workers collecting unemployment insurance benefits had also fallen to a recent low.

“That’s what you call a strong economy,” he said.

The reality is more complicated.

By Thursday, the average price of gas nationwide topped $4.55 per gallon, according to AAA, an increase of more than $1 from a year earlier. The increase has cut deeply into consumers’ finances at a moment when many were already reporting strain from stubbornly high costs across the economy, which may be the real reason that some are spending more now.

Experts generally see the employment picture as stable, and some analysts have echoed the view of the administration that this jobs report could be strong. But the trajectory of the overall U.S. economy this year nonetheless hinges on whether Mr. Trump can soon bring about an end to the war with Iran.

In a research note last month, analysts at Goldman Sachs predicted that the unemployment rate could tick up to 4.6 percent by the end of 2026 while income growth could slow, citing rising fuel costs. Businesses could pull back, which could have the effect of slowing growth through the remainder of the year, economists have found. Each of those conditions could worsen precipitously if hostilities with Iran restart, further snarling oil shipments in the Strait of Hormuz.

The developments could easily overshadow Mr. Trump’s hopes for an economic boom in time for the midterm elections. The White House had been particularly hopeful that it could tout the arrival of generous tax refunds this spring and summer, clinched through Mr. Trump’s tax package enacted last year.

Instead, that money largely has served as a “buffer” for many consumers, helping to offset the impact of high gas prices, Kathy Bostjancic, the chief economist at Nationwide, said earlier this week.

“Essentially, that incremental increase in tax refunds is all going into the gas tank,” she said.

On one hand, Ms. Bostjancic said, the U.S. economy had “weathered things” well. It stood to grow, even if more slowly than first expected, while avoiding so far a severe disruption in the labor market.

But, she added, “It all depends on how high gasoline and energy prices go, and for how long.”

Article source: https://www.nytimes.com/live/2026/05/08/business/jobs-report-economy/with-fuel-costs-soaring-trump-insists-the-economy-is-strong