Last night, President Donald Trump delivered his 2026 State of the Union (SOTU) address, the first in his second administration.
The big message from the 107-minute speech: America is back. He focused on progress on key household economic issues, in addition to promises met on border security, public safety and crime, foreign policy leadership, and domestic strength.
While all of these other issues hold varying levels of importance to the American electorate, the cost of living is pre-eminent. He had to assure Americans that this administration has not lost focus on making life more affordable.
As expected, his tone was cheerfully optimistic with some sharp elbows for leftists whose policies in the previous administration contributed to America’s decline and economic woes.
President Trump pointed to good news on many fronts. As I wrote in my Newsmax op-ed yesterday, President Trump should take a victory lap for the economy not crashing as predicted by economists. Make no mistake. There is still work to be done, but let’s celebrate a robust economy regaining its strength and prices retreating from generationally-high increases during the Biden era.
Here are five highlights from the State of the Union Address that should inspire hope in Americans about affordability and that their financial situation will get better this year:
1. Wages are up and prices are down.
Today our border is secure, our spirit is restored, inflation is plummeting, incomes are rising fast, the roaring economy is roaring like never before,” said Trump. “Our enemies are scared.”
Private-sector workers are seeing real wage gains: Average hourly earnings and weekly earnings growth are outpacing price growth. Real incomes rose nearly $1,400 in just one year, which makes every dollar go farther for households.
Meanwhile, the inflation rate at 2.4% in January is below the 3% level when former President Joe Biden left office. Core inflation dropped to its lowest level in nearly five years as well.
President Trump ticked off a list of price declines:
The price of eggs is down 60 percent… The cost of chicken, butter, fruit, hotels, automobiles, rent, is lower today than when I took office, by a lot. And even beef, which was very high, is starting to come down significantly.
2. Homeownership is getting cheaper.
Mortgage rates are the lowest in four years and falling fast, and the annual cost of a typical new mortgage is down almost $5,000 just since I took office, one year.
The president’s solution to ban institutional investors from purchasing single-family homes is not the best way forward, but, as I wrote, deregulation and tax policy will increase supply and bring down costs.
3. Jobs, jobs, jobs: Employment at record highs, government jobs at record lows.
More Americans are working today than at any time in the history of our country. Think about that, any time in the history of our country, more working today and 100 percent of all jobs created under my administration have been in the private sector.
Importantly, the labor market is re-privatizing. Job growth is shifting from public jobs supported by massive federal spending to private-sector growth reflecting a growing economy. Federal employment as a share of the total workforce has fallen to its lowest level in recorded history.
4. “Drill, baby, drill” has pushed prices down at the gas pump.
American natural gas production is at an all-time high because I kept my promise to drill baby drill.
Further, he illustrated how low gas prices have fallen:
The average price of gas is now below $2.30 a gallon in most states and in some places $1.99 a gallon. And when I visited the great state of Iowa just a few weeks ago, I even saw $1.85 a gallon for gasoline.
5. Bigger tax funds, bigger paychecks, and eliminated penalties on hard work thanks to the 2025 Working Family Tax Cuts.
Last year, I urged this Congress to begin the mission by passing the largest tax cuts in American history and our Republican majorities delivered so beautifully. Thank you, Republicans… We held strong and with the Great Big, Beautiful Bill, we gave you no tax on tips, no tax on overtime and no tax on Social Security for our great seniors.
Only Republicans stood and cheered, because only Republicans voted for this tax bill
President Trump illustrated the point with a story from one of his guests:
I met Megan Hemhauser, a devoted mom who home schools her children — beautiful, two children — during the day while waiting tables at night as her husband works overtime operating very heavy equipment.
Megan is here this evening and she’s happy to tell you that she is so, so much richer because, with no tax on tips, no tax on overtime and our expanded child tax credit done again by Republicans, Megan and her husband will take home more than $5,000 extra just for the year cutting her tax bill in more than half.
Bottom Line
The president’s speech touted progress and promised more relief on affordability. It was important to remind Americans that the economic agenda of deregulation and tax cuts is working, but that more can be done. For many, there is still an incongruence between the headline data on jobs, prices, and wages and their unique financial situation.
Perceptions can be skewed from reality, but what motivates Americans to continue to support this leadership, especially in Congress, is to know that their dollars are going farther, their budgets are getting bigger, and economic mobility is rising for them.