The economy has been the biggest concern for voters this election cycle, with Democrats hoping that discontent will propel them to victory on Tuesday. Here is what the economic snapshot looks like on Election Day.
President Donald Trump ran on quelling the inflation experienced under former President Joe Biden, who presided over the sharpest price increases in decades. But the Trump administration has been unable to return inflation to the 2% level the Federal Reserve considers healthy.
And dissatisfaction with the economy has hurt consumer sentiment, overshadowing the relatively healthy labor market, continued economic growth, and stock market gains.
“What Trump said he would do when he got into office is that he wouldn’t only bring down inflation, he’d bring down the price level,” Desmond Lachman, a senior fellow at the American Enterprise Institute, told the Washington Examiner on the eve of the election. “That obviously hasn’t happened. Inflation’s running more than it was in the last year of Biden.
“That’s what voters are upset about.”
Inflation
Inflation is the economic indicator that has been most closely watched in the lead-up to the midterm elections.
The September consumer price index report, the most popular inflation gauge, showed that prices rose 3.7% on an annual basis. And the personal consumption expenditures price index, released just last week, showed inflation clocking in at 3.6%.
For reference, CPI inflation had gotten down as low as 2.4% in January of this year, and PCE inflation was registering at 2.7% around that time.
That upswing in inflation is almost entirely caused by energy price increases stemming from the war with Iran, which began in February and has caused oil and gas prices to spike.
But the situation for voters is made even more frustrating because wage gains in recent months have not kept up with the higher inflation.
Average hourly earnings grew at a 3% year-over-year rate in September, down from 3.1% in August and 3.2% in July.
“Overall, if you look over the last year for all employees, people can buy less with a sort of average hour of work than they could a year before,” Aaron Sojourner, a labor economist and senior researcher at the W.E. Upjohn Institute for Employment Research, told the Washington Examiner.
Gas prices
An even more glaring example of the recent inflation has been how much gas prices have gone up over the past several months.
As of Monday, according to AAA, consumers were shelling out $4.17 for a gallon of regular gasoline. Diesel prices were even higher, at $6.29 per gallon, on average.
Looking at the consumer price index metrics for gasoline, gas prices have risen 39% since Trump began his second term. And gas prices are something that voters encounter frequently.
“That’s the one that people hate the most,” Dan North, a senior economist with Allianz Trade Americas, told the Washington Examiner. “They love to hate gasoline prices because they’re right in your face every time, and you have to buy it.”
Jobs
Inflation and affordability concerns have crowded out Republican messaging about some of the brighter spots of the economy, such as the labor market.
Job gains are running above the rates needed to keep unemployment stable.
The unemployment rate is 4.2%, very low by historical standards.
Claims for unemployment benefits have been extremely low, indicating that layoffs are rare.
The next employment report comes out Friday, and economists are forecasting that the economy will add some 55,000 jobs.
Economic growth
Another bright spot for the economy is overall economic growth and output.
The economy grew at an inflation-adjusted 3.4% annual rate in the third quarter, adjusted for seasonal variations, the government reported last week in the final GDP report before the midterm elections.
And growth was solid in the two preceding quarters as well. In the second quarter of this year, GDP clocked in at a 2.2% rate. The growth rate was 2.5% in the first quarter.
“The economy is also doing well,” said Chris Zaccarelli, chief investment officer for Northlight Asset Management. “With a 3.4% annualized GDP growth, the United States is growing much faster now than it was during the decades of 2% average annual growth.”
Stock market
The stock market has, generally speaking, performed well since the start of the year. Some economists point to investment associated with the artificial intelligence boom as part of the reason.
The benchmark S&P 500 has risen more than 9.96% in 2026 alone, and even more over the past calendar year.
Meanwhile, the tech-heavy Nasdaq has grown by over 8% overall since the start of the year, although overall gains since the start of the year have been cut, with the index down 7.45% in the past month alone.
The day before the midterm elections, stocks were mixed, with the Dow Jones Industrial Average rising slightly on Monday while the S&P 500 and Nasdaq were in the red.
But the gains in the stock market are not something all voters feel. Many voters, particularly those struggling the most with inflation, don’t directly own stock. Lachman said the fact that those people see the stock market benefiting those who are typically wealthier and bought in could actually be a “big source of discontent” for those voters.
Housing market
The housing market has been a challenge for years now. Homeownership has long been equated with the “American dream” and with the feeling of economic success and contentment in the U.S.
But higher mortgage rates and a huge surge in home prices since the pandemic have put homeownership out of reach for many voters.
Shelter costs have risen over 30% since early 2021.
And, as of Monday, the average rate on a 30-year fixed-rate mortgage has risen to 7.27%, according to Mortgage News Daily. Rates were below 3% in 2021.
Accordingly, the monthly payment on the mortgage for a typical house has doubled since the pandemic.
Sentiment
And the confluence of all of these economic factors has led to consumer sentiment clocking in at some of the lowest levels on record — at times, even lower than the depths of the Great Recession, when the U.S. was facing spiking unemployment.
Consumer sentiment fell to 48, down from 48.1 in September, according to a final reading of the University of Michigan Consumer Sentiment Index for October. In the history of the gauge, sentiment was only lower in May.
Overall consumer sentiment is down more than 10% from a year ago today.
A big driver of that is the mismatch between inflation and wages.
“So if you ask most people, ‘Are they better off than they were two years ago?’ The answer is no, because inflation has risen and their wages haven’t kept up,” Lachman said.
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[ H/T Washington Examiner ]
