US Economy Faces Voter Scrutiny Ahead of Midterm Elections
Inflation, consumer sentiment, and job market fluctuations are key economic indicators shaping voter concerns.
As the midterm elections approach, the U.S. economy is a central concern for voters, with data highlighting inflation, fluctuating consumer sentiment, and volatile job growth.
Most major economic data crucial for voters ahead of the Nov. 3 midterms has been released. However, the economy remains a top concern for Americans grappling with increasing difficulty in making ends meet. The University of Michigan's latest monthly survey indicates that consumer sentiment has reached its second-lowest level in the survey's 74-year history. Polling also reveals that half or more of Americans find every measured household purchase category "unaffordable," with gasoline cited as unaffordable by 71% of respondents, a significant increase from February.
The average price for a gallon of regular unleaded gasoline stood at $4.22 per gallon, an increase of $1.19 from the previous year, according to AAA. Diesel prices averaged $6.33 per gallon, $2.65 higher than a year ago. Despite these pressures, employers continue to add jobs, and the economy is experiencing growth, albeit at a slower hiring pace.
President Donald Trump has pointed to "unbelievable growth, the biggest growth in the history of our country." While acknowledging the rise in oil prices, Trump stated that the conflict with Iran was necessary to prevent the country from acquiring nuclear weapons.
Inflation and Consumer Impact
Inflation has risen, impacting household budgets and leading to consumer dissatisfaction. In September, prices increased at an annual rate of 3.7%, exceeding the Federal Reserve's target rate of 2%. This pace of price increases outstrips average wage growth, diminishing workers' purchasing power. Since April, wages have trailed inflation, intensifying budget constraints. The ongoing rise in prices has negatively affected consumer outlook, with expectations for future inflation also increasing, according to the University of Michigan survey.
Economic Growth and AI's Role
The economy has continued to grow robustly, expanding at an annualized rate of 3.4% in the three months ending in September, according to a government report. This represents an acceleration from the previous two quarters. Economic growth for the year is consistent with the expansion seen in 2025. A significant factor contributing to recent economic growth has been increased spending on artificial intelligence, which has accounted for over 20% of economic growth in the first two quarters of the year, according to J.P. Morgan Asset Management. Consumer spending, a key driver of economic activity, has also remained resilient, showing a 0.9% increase in August from July.
Job Market Performance
The labor market has shown robust job growth, although month-to-month performance has been inconsistent. The U.S. added an average of approximately 68,000 jobs per month in the first nine months of the year, an increase from the previous year. However, job gains have fluctuated, with only 29,000 jobs added in September, a sharp decrease from 133,000 in August. Despite this volatility, the annual unemployment rate has remained consistently low, at 4.4% or lower, with exceptions during the pandemic years of 2020 and 2021.