Economic analyst reveals 'two Americas' phenomenon primed to sink Trump

President Donald Trump's handling of the economy has resulted in "two Americas" being created, according to one leading economic analyst, and it is also a familiar situation that could spell doom for him and the GOP in the coming midterm elections.

During a Wednesday segment on CNN, host Sara Sidner spoke with Rana Foroohar, a global economic analyst for the network as well as an associate editor for the Financial Times, about the most recent inflation numbers. Per the latest reports, the rate of inflation slowed down for the second month in a row in July, putting the annual rate at around 3.4 percent.

Despite this trend, Sidner noted that many people "can't afford their lives," and pressed Foroohar about why things still feel "so bad" for so many consumers. The analyst explained that inflation can often be a "lagging indicator" relative to consumer sentiment, and does not represent the lived reality that people are dealing with every day when they shop for groceries or fill up their cars.

"How do you feel sitting in your office? How do you feel when you drive past the gas station and see that price? How do you feel in the grocery store?" Foroohar said. "And people have felt pinched for a long time, and it actually takes months after you begin to feel pinched and feel like, oh my gosh, I'm in a cost of living crisis. I can't afford my life. My house is too expensive. I have to think about medication costs. It takes a while for that feeling to abate. It's almost like a little bit of inflation PTSD, if you will."

Foroohar further explained how the economy under Trump has become what many economists call "K-shaped," referring to a phenomenon where the wealthiest consumers are doing well and spending more, while the rest struggle. This, she noted, explains why many people feel they are in a cost of living crisis, while things like travel spending are also reaching record numbers.

"It's beenthe same answer for years now.It's the bifurcation," she explained. "Therereally are two Americas. Thereis an America that, you'reabsolutely right, is waitingin Newark [Airport]. I just came fromthere and it's very crowded... It's August, peopleare traveling, actually. Travel is at a record, infact... There are groups of people thathave that money and can do thosetrips, that top 10 percent of thepopulation, which is primarilywhat we're talking about, isspending 60 percent of the money in theeconomy."

She continued: "So you can look aroundand say, okay, restaurants areopen, you know, things arehappening, the economy is good. But the folks that are moretowards the bottom in terms ofwages, in terms of jobs, interms of assets, maybe theydon't have so much in the stockmarket. Maybe they don't own ahome. They are not feeling good.They are feeling incrediblypressed."

These issues, Foroohar noted, are on full display in the midterm primary season as voters show support for candidates telling them, "we see you, we feel your pain," which is primed to doom Republicans in November.

"We've seen that movie before," she concluded.