It is a political challenge as tough as any in the modern era: inflation.

This week, President Donald Trump may have made the issue even more challenging for himself and his Republican Party as they gear up for next fall’s midterm congressional elections.

Almost 11 months into his second term, President Trump began the week by giving the economy a superlative grade: “A-plus-plus-plus-plus-plus.”

Why We Wrote This

With his approval rating for economic leadership dropping in polls, President Trump has tried to downplay voters’ concerns about affordability. The same problem that tripped up Joe Biden is now dogging Mr. Trump.

Then, in a speech Tuesday in rural Pennsylvania billed as the launch of an “affordability tour” aimed at reassuring voters about the economy, Mr. Trump mocked the idea of affordability.

Moments later, he reversed himself.

“I can’t say affordability is a hoax,” the president told a packed ballroom at a casino resort in Mount Pocono, Pennsylvania.

In real time, Mr. Trump is playing out the classic conundrum of a newly elected president seeking to forestall the fate of many a predecessor: a midterm election drubbing that severely limits his ability to pass his agenda through Congress.

For now, the president is trying to convince voters that their economic situation isn’t that bad, even if they’re struggling to make ends meet. Despite optimism rooted in lower interest rates and a strong stock market, inflation remains hard to tame. It continues to run relatively hot at 3% as of September, according to the most recent monthly report available from the Bureau of Labor Statistics. That’s well above the Federal Reserve’s target rate of 2%.

The challenge for President Trump is to acknowledge reality while helping voters to still feel hopeful.

Douglas Holtz-Eakin, president of the conservative-leaning American Action Forum think tank, says Mr. Trump needs to give voice to the reality that voters are living.

“It’s not effective to tell people they’re wrong about what they’re paying for things,” says Mr. Holtz-Eakin.

Falling poll numbers on economic leadership

The latest public opinion polls put Mr. Trump’s challenge in sharp relief. The AP-NORC survey released Dec. 11 puts the president’s approval rating on economic leadership at just 31%, down from 40% in March. The December figure is his lowest economic approval rating in that poll for either his first or second term. The RealClearPolitics polling average similarly shows the president underwater on the economy.

Mr. Trump’s overall job approval rating is now 36%, according to AP-NORC, down from 42% in March. Among Republicans, he’s still relatively strong at 69%.

But the overall numbers reflect the president’s challenge as voters square their personal circumstances with their voting preferences.

“Fundamentally, I think the problem is that voters are still [ticked] off at the fact that the prices are 25% to 30% higher than they were five years ago,” says Ryan Bourne, an economist at the libertarian Cato Institute. “Trump is frustrated with this, because there’s not a great deal that he can do to get them down dramatically across the board.”

Mr. Bourne adds that for most of this year, wages have been growing faster than prices, but “despite that, people are still annoyed.”

Another major factor that could play into voters’ calculations is health care. On Thursday, the Senate rejected proposals from both Republicans and Democrats to address health care subsidies that are set to expire at the end of the year with the Affordable Care Act, also known as Obamacare. With Congress set to recess for the holidays, this effectively ensures more than 20 million Americans who get their health care through the Obamacare exchanges will see their premiums rise substantially on Jan. 1.

Managing expectations

For Mr. Trump, his administration, and the Republican Party, the challenge will be to manage expectations. At his Pennsylvania rally this week, the president delivered a 90-minute speech that was classic Trump: part prepared remarks, part greatest hits from his campaigns, part seeming stream of consciousness.

Whether that’s effective messaging is an open question. The MAGA faithful are happy he’s back doing rallies in the U.S., after a first year back in office dominated by foreign travels and diplomatic ventures. But presidential favorability ratings pivot heavily around the economy, fairly or not, and Mr. Trump is now trying to convince voters he’s on the case.

After his contradictory messaging at the Pennsylvania rally, it wasn’t clear how the president’s “affordability tour” would proceed.

On Friday, the White House announced that Vice President JD Vance will visit Allentown, Pennsylvania, on Dec. 16 to “deliver remarks celebrating President Trump’s economic success and the administration’s commitment to lower prices and bigger paychecks.”

The key is to make sure Trump supporters are motivated to turn out in the midterms next November, when Republicans are in serious danger of losing the House. Retaking the Senate, while a longer reach for Democrats, isn’t completely out of the question.

In addition, Mr. Trump’s second-term focus on glamming up the White House – building a large ballroom, gilding the Oval Office, transforming the Rose Garden into a garden café – and mingling with billionaires may not be helping his image with the swing voters he will need to win over.

Managing the message

The overarching message to voters needs to be realistic, says Mr. Holtz-Eakin, a former director of the Congressional Budget Office.

“If I were on the economic team in this White House, I would not be talking about prices at all or inflation at all,” he says. “I would be talking about the overall policies, taken as a whole, being there to guarantee that Americans have got good jobs with rising wages so they can afford the things that they value.”

Mr. Bourne, the Cato economist, sees opportunities for Democrats to take advantage of Mr. Trump’s mixed messaging on affordability – which, in Pennsylvania, included a repeat of his infamous comment that “you don’t need 37 dolls for your daughter. Two or three is nice.”

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Democrats can use the fact that “people are frustrated that Trump isn’t able to get the price level back down to where it was in 2019,” Mr. Bourne says.

“For certain people who are directly affected by the president’s tariffs, whether that’s households or businesses, it can feel like in some areas, Trump has made the situation worse, needlessly.”