Donald Trump is adamant the US economy is doing well.

“This is also the golden age of America because we are doing better than we’ve ever done as a country,” the US president said in a speech to McDonald’s franchise owners and suppliers on Monday. “Prices are coming down and all of that stuff.”

President Donald Trump’s confidence in the strength of the US economy doesn’t stand up to scrutiny. Credit: Bloomberg

Trump personally thanked the fast-food chain for doing its bit by lowering its prices.

But McDonald’s decision to reintroduce “extra value meals” for $US5 ($7.75) and $US8 in September for the first time in six years was not a symbol of the president’s success in bringing down the cost of living.

Instead, it is one of many symptoms of the deep cracks that are spreading across the American economy.

McDonald’s chief executive Chris Kempczinski warned that households are struggling. He told CNBC: “Particularly with middle- and lower-income consumers, they’re feeling under a lot of pressure.”

So much so that many are skipping meals like breakfast altogether.

Scott Boatwright, the chief executive of fast-food chain Chipotle, also made a similar warning at the end of October. Households with income of less than $US100,000 were spending significantly less, Boatwright said. “That consumer is under pressure.”

Massive bets on an artificial intelligence (AI) revolution have driven rapid growth in US tech giants, record stock market highs and a “wealth effect” that is driving spending among the nation’s wealthiest households.

But underneath the AI sheen, much of America’s real economy is on the rocks. Lay-offs have soared, consumer confidence has plummeted and poorer households are becoming increasingly overburdened with debt.

The University of Michigan’s index of consumer confidence dropped to 50.3 in November, down from 71.8 a year earlier, when Trump had just won the election, and close to the all-time record low of 50 seen in June 2022, during........

© Brisbane Times