AMNA NAWAZ: President Trump marks his first year in office with an economy that looks a lot like the one he inherited, low unemployment, strong consumer spending and inflation gradually improving.

After year one of the second Trump presidency, inflation has slightly decreased and currently sits at 2.7 percent.

Tariff revenue soared to more than $200 billion after a sweeping slate of new levies in April, but the trade deficit still totaled over $1 trillion.

Hiring slowed significantly, with 2025 the slowest year for job creation since 2003.

But the economy proved resilient and GDP grew by 4.3 percent in the third quarter last year, the biggest jump in two years.

At yesterday's White House briefing, President Trump hailed his policies and hit on the number one issue for Americans, affordability.

DONALD TRUMP, President of the United States: We have taken a mess and made it really good.

It's going to get even better.

But if you look at prices from a year or a year-and-a-half ago, you look at the Biden prices, they were way up through the sky.

And they use the word affordability.

They just say affordability, and they don't talk about it.

They created the affordability problem, and we are solving it.

AMNA NAWAZ: For a closer look, I'm joined now by Heather Long, chief economist at Navy Federal Credit Union.

Great to see you.

Thanks for being here.

HEATHER LONG, Navy Federal Credit Union: Thank you.

AMNA NAWAZ: So, as you well know, President Trump returned to office promising a golden age for the American economy.

He said he was going to lower prices, bring back manufacturing jobs.

Big picture overall, how is he doing on those promises?

HEATHER LONG: Well, it's incomplete, let's call it.

There's been some movement on inflation, but not a lot.

And that's why Americans are still really frustrated with the economy.

And in particular on this affordability issue, some of the costs in the past year, like electricity, grocery prices, and health care are starting to rise.

And these are basic items that really hit home for a lot of American budgets.

The other thing that's been really hard for a lot of people on Main Street to reconcile is they see these really strong GDP growth numbers, they see the stock market at a record high, but they don't really feel it, because I have been calling this a jobless boom.

There's a boom, but we have had virtually no job creation outside of health care since April.

And that's really weighing on a lot of everyday middle-class Americans.

AMNA NAWAZ: You know, a lot of analysts had predicted that tariffs would have much more of a negative impact on the economy than they have had so far.

But why haven't we seen this spike in prices many people predicted?

HEATHER LONG: Well, you're right.

We certainly haven't seen the worst-case scenario.

I mean, people were warning of recessions.

They were saying that inflation could be back at 5 percent.

And that's not at all where we are sitting here today.

But I think it's also fair to say there has been some impact on the economy.

We're raising about $30 billion a month in tariff revenues.

That works out to $100 to $200 per household in America.

Now, that doesn't mean every American's paying it.

Some of it is being absorbed by businesses.

But there is -- Americans are paying the bulk of that tariff cost.

And, really, who's been hit hard, Amna, is small businesses.

Small businesses brought that Supreme Court case against Trump's tariffs.

And then again, we have also seen the manufacturing sector really struggle in the past year, be in a bit of a slump for a lot of the manufacturing industry.

AMNA NAWAZ: We know one of the goal of the tariffs was to reduce trade deficits, and the deficit did narrow significantly at the end of last year.

Is that the tariffs doing what they were intended to do?

HEATHER LONG: Sure.

I mean, in some ways, yes, we are raising a bunch of revenue, and we are certainly shifting a lot of things in the economy.

But I think if the real goal here is to create an industrial boom and to bring jobs back to the United States, we are not seeing a lot of evidence of that so far.

And certainly a lot of Americans are frustrated that -- if you have gone shopping for a sofa in the past year, I feel sorry for you.

People can really start to see some of the areas, like appliances or household furnishings or electronics.

And I can tell you, in our data at Navy Federal Credit Union, we have seen this massive shift of Americans spending more at Costco and Walmart and Sam's Club and Aldi, all these warehouse and discount retailers, because they are feeling the strain.

AMNA NAWAZ: One of the major significant accomplishments the president touted from his first year was the passage of that Big Beautiful Bill, including those big tax breaks and tax cuts.

He even mentioned it in his remarks at Davos.

Have we seen the impact of that already or will most of that come in this year?

HEATHER LONG: It's coming, and it's coming really soon here in the tax season.

People will be getting larger tax refunds, on average about $600 larger.

And, look, that's meaningful money right now, particularly to the middle-income families and to more moderate-income families.

This will be a big boost to the economy this year, both the corporate and the individual tax reductions.

And that's why a lot of economists think 2026 will be a hot economic year, at least for growth.

Looking at growth maybe 2.5 to 3 percent this year, which is very strong.

But the big question is what we have been talking about.

Will middle-class families feel it this year?

AMNA NAWAZ: Well, on this issue of affordability, which is the number one issue for Americans, you mentioned a mixed picture there when it comes to different prices, price of gas coming down, other goods, milk, bread, beef going up.

You add to that rising health care premiums, which you mentioned, the enhanced subsidies that expired.

Have we seen this administration yet do enough to tackle those issues, the everyday costs and affordability issue for Americans?

HEATHER LONG: I think we're starting to see them recognize it and pivot to it, which is encouraging.

But, so far, a lot of the things that they have suggested in these areas, they seem a little bit small potatoes to me.

And I think you look at housing affordability, the number one -- one of the number one issues of young Americans, and they have thrown out things like, OK, maybe you could borrow money from your 401(k) for the down payment, or maybe we could do a 50-year mortgage.

And again, a lot of these things, they're very small impact.

What we really need in the United States is more housing supply.

We need a construction boom, build, build, build homes, particularly smaller homes, townhomes, duplexes, homes on smaller lots like they have in Houston.

We are capable of doing this, but we really need effort from Congress and the president to make this the year of housing affordability.

AMNA NAWAZ: Heather Long, chief economist at Navy Federal Credit Union, good to talk to you.

Thanks for being here.

HEATHER LONG: Thanks a lot.