Archive · 1 Oct 2026
US Economy Sends Mixed Signals Before Midterm Elections
The US economy is showing both good and bad signs before the midterm elections.
The economy grew faster than first estimated.
Businesses also added more jobs than expected in September.
However, prices are still rising faster than the Federal Reserve wants.
Some of the reported improvement in inflation came from a change in how inflation was calculated.
People are also paying high costs for mortgages and other loans.
Many everyday items, including fuel oil and ground beef, became more expensive over the past year.
Supporters of Donald Trump can highlight economic growth and slightly cooler inflation.
Democrats can emphasize that families still face high prices and borrowing costs.
US GDP growth was revised up to a 2.2% pace, with consumer spending, investment and exports contributing.
Private employers added 90,000 jobs in September, while forecasts for the official jobs report ranged from 38,000 to 98,000.
August PCE inflation was 3.4% overall and 3.0% excluding food and energy, above the Federal Reserve’s 2% target.
The reported PCE cooling partly reflected a methodology change that reduced core inflation by an estimated 0.3 percentage points.
Voters still face elevated prices and borrowing costs, including sharp increases in fuel oil, food, electricity and loans.
- Who
- US consumers, businesses, workers, Donald Trump’s supporters and Democrats are central to the economic debate.
- What
- Economic data show stronger-than-expected growth and hiring alongside elevated inflation, high borrowing costs and falling consumer confidence.
- When
- The data were reported five weeks before the midterm election, with figures covering the second quarter, September employment and August inflation.
- Where
- The economic activity and consumer impacts discussed are in the United States.
- Why
- The mixed indicators may influence how voters judge the economy and which party they support in the midterm election.
Democratic emphasis
Trump-supporter emphasis
How to interpret the economic data
Democratic emphasis
Democrats can point to prices still rising above 3%, high mortgage and loan costs, and an oil shock tied to the Iran war.
Trump-supporter emphasis
Supporters of Donald Trump can point to the upward GDP revision, solid growth and cooler-than-expected inflation.
What matters to voters
Democratic emphasis
High price levels and borrowing costs may outweigh improved headline economic figures because households judge the economy through their own budgets.
Trump-supporter emphasis
Growth, hiring and slightly cooler inflation can be presented as evidence that the economy is performing better than critics claim.
Quality of growth
Democratic emphasis
Critics may argue that the economy is uneven, with manufacturing remaining broadly flat and consumer confidence declining.
Trump-supporter emphasis
The growth figures include stronger consumer spending, business investment and exports, with nonhousing business investment rising 9% amid an AI investment boom.
- GDP growth
- US GDP grew at a 2.2% pace, up from 1.5% in the second estimate.
- Consumer confidence
- Confidence fell 6.7 points to 81.9 from 88.6 in August.
- September private hiring
- ADP reported 90,000 new private-sector jobs, above expectations of about 68,000.
- PCE inflation
- August PCE inflation was 3.4% overall and 3.0% excluding food and energy.
- Inflation target
- Both PCE measures remained above the Federal Reserve’s 2% target.
- Methodology change
- The Bureau of Economic Analysis changed calculations for computer software, legal fees and investment advice, reducing core inflation by an estimated 0.3 percentage points.
- Selected price increases
- Over 12 months, fuel oil rose 52%, ground beef 7.2%, fish and seafood 6.5%, coffee 6.1%, sugar and sweets 6.1%, and electricity 3.8%.