Photo: Bnuuy, via Wikimedia Commons (CC0). File photo of a gas price board in California, September 2026, not a photo of voters.
On the eve of midterm elections that will decide whether President Donald Trump's Republican Party keeps control of Congress, American voters have one issue above most others on their minds: the economy. Prices remain high and, for many households, still rising — and many voters blame the president's policies, specifically tariffs and the war with Iran, for the nagging inflation.
In short, Americans are in a sour mood. Trump is not on the ballot on Tuesday, November 3, but his economic record is, in the eyes of many voters heading to the polls.
The numbers tell a calmer story
The headline economic figures, taken on their own, look far healthier than the public mood suggests. The unemployment rate remains historically low, more people than ever are employed, and overall economic growth is solid. The artificial intelligence investment boom has, until recently, driven the stock market to dozens of record highs this year, padding retirement accounts for millions of Americans.
Data released last week showed the US economy grew at a 3.4 percent annualized pace last quarter, its strongest performance this year. Business investment rose at an annualized 12.7 percent pace, fuelled by AI-related demand. Weekly unemployment insurance claims are near a 57-year low, and the unemployment rate, at 4.2 percent in September, has measured no higher than 4.5 percent for five straight years — the longest stretch on record.
Treasury Secretary Scott Bessent struck an upbeat note last week, telling CNBC: "Consumer surveys can be a little gloomy, but the consumer behavior is quite strong. Corporate behavior is actually quite strong, and I think with tax policy, trade policy, energy policy and the regulatory policy, we've got a very good mix."
Why it still feels bad at the checkout
Yet the lived experience of prices tells a different story from the macro data. Inflation, though not nearly as high as just a few years ago, remains elevated and ever-present enough that people feel the pinch whenever they fill their gas tanks, pay a utility bill or order a meal. Although it has slowed since its 2022 peak, inflation remains well above the 2 percent target the central bank equates with price stability.
Consumer surveys show the mood has generally deteriorated since Trump's second term began in January 2025, though with nuances: one widely tracked measure of confidence published by the Conference Board perked up in October, while the University of Michigan's consumer sentiment index registered a near-record low. Brian Jacobsen, chief economic strategist at Annex Wealth Management, said the confidence index tracks the macroeconomy, while the sentiment index is "more personal," asking people how they are doing financially and how affordable they find their lives to be. "Sentiment is the bigger driver of election outcomes, but confidence is the bigger driver of markets," he said.
For much of Trump's second term, wages were growing faster than prices, meaning workers could expect their paychecks to cover as much or more of the same goods and services as before. That situation changed earlier this year after the US and Israel launched attacks on Iran in what has become an eight-month war that has lifted fuel prices globally and contributed to price acceleration more broadly. Demand for AI is also adding to inflation, Federal Reserve policymakers and economists say, and wage growth is slowing. Consumer prices and average hourly earnings have both risen about 5.5 percent since January 2025, data from the US Bureau of Labor Statistics shows. The upshot: from a purchasing-power perspective, workers are no worse off, but also no better off, than when Trump came into office.
The Fed factor and the housing squeeze
The central bank has moved to fight the price pressures. The Federal Reserve raised its policy rate in September and is expected to increase borrowing costs again in December, delivering what Fed Chairman Kevin Warsh calls "monetary medicine" to bring down inflation without, he says, the need "to throw sand in the gears" of the economy and throw people out of work.
Longer-term borrowing costs have also risen, adding to the affordability woes voters cite. The combination of 30-year mortgage rates that have topped 7 percent and a shortage of housing supply that has driven up home prices has conspired to put home purchases out of reach for many people.
Some economists warn of further fragility. As the midterms neared, corporate earnings results from companies such as Amazon and Intel added to growing worries about the sustainability of the AI spending boom, sending indexes such as the Nasdaq Composite sharply lower. Torsten Slok, chief economist at Apollo Global Management, wrote in a mid-October note that a sharp reset in AI expectations could undermine corporate confidence, trigger a pullback in capital expenditure and weigh on GDP growth, just as higher oil prices, tariffs and tighter immigration restrictions push inflation higher — raising the risk of a stagflationary environment in which growth slows even as price pressures persist.
What happens on Tuesday
Americans vote on Tuesday, with all 435 House seats and 35 Senate seats on the ballot. Democrats need a net gain of four seats in both chambers to overturn Republicans' narrow 218-214 and 53-47 majorities. How voters judge the economy — the strong growth figures or the prices they see every day — may decide whether they hand the president's party a rebuke or accept the status quo.
The paradox of this election, then, is a country whose economy is growing and whose jobless rate is low, but whose voters still feel squeezed. The numbers say Americans are holding up. The mood says they are fed up. On Tuesday, the mood gets to vote.
Sources: Reuters, November 2, 2026; DD India (Reuters syndication), November 2, 2026. Poll and survey findings are as reported by the cited outlets; the characterization of voter blame for inflation is as reported by Reuters.