Republicans enter the upcoming midterm elections facing the highest rate of inflation seen since the spring, following the release of a federal government report on Wednesday. With the exception of the pandemic, since 1990, september’s inflation rate is the highest it has been before a midterm election. On Tuesday, Trump posted on social media that Yemen’s Houthi group was attacking Saudi Arabia in a deliberate effort to affect the upcoming elections. “They’ve emerged again, probably at the behest of Iran … in a very nasty way, hitting Saudi Arabia, and purposefully trying to drive up Oil Prices, probably prior to the U.S. Send us your questions on how the US economy is shaping the midterm elections.
Data from the Bureau of Labor Statistics indicates that US price increases climbed to an annual rate of 3.7% in September, moving up from 3.4% in August. This final inflation assessment arrives as public opinion polls reveal widespread voter frustration regarding the cost of living under the current administration. In recent weeks, Trump has attempted to downplay his administration’s role in price increases, pointing to the Iranian government as the cause of the squeeze.
The latest figures represent the highest level of price growth since the annual inflation rate peaked at 4.2% in May. Gasoline drove more than half of the overall price increases, rising 34% compared to the previous year. Meanwhile, fuel oil used for home heating jumped 74% from last year, creating concerns for households heading into the winter months, while air travel costs increased by 22.4%.
Overall consumer prices advanced 0.6% from August levels. Core inflation, which excludes volatile energy and food categories, edged up 0.3% in September to reach an annual rate of 2.6%.
Much of this year’s price pressure stems from the US-Israel war with Iran, which sent energy expenses surging. AAA data shows average gasoline prices remaining over a dollar per gallon higher than a year ago, and diesel prices supporting domestic supply chains hit a record high last month.
The economy remains a primary concern for American voters as escalating gasoline costs and persistent inflation diminish household budgets. Research from Brown University indicates that higher energy expenses resulting from the conflict with Iran have cost US consumers a total of $133bn, averaging more than $1,020 per household.
A recent survey conducted by Reuters/Ipsos reveals that 78% of Americans attribute inflation outpacing their earnings to the policies of the Trump administration, a view shared by 57% of polled Republicans who support Donald Trump.
Donald Trump has defended his economic track record, asserting during an Alaska rally that government support for families has been substantial and noting that critics consistently focus on affordability. The White House did not immediately provide comment on the September inflation data.
Elevated inflation places increased pressure on the Federal Reserve to continue raising interest rates to cool prices. Following last month’s first rate hike since 2023, borrowing costs have climbed, pushing the average 30-year fixed mortgage rate to 7.40%. Applied to the most commonly used loans for home ownership, is up to 7.40%, the 30-year mortgage rate.
Richard Carter, head of fixed interest research at Quilter Cheviot, noted in a statement that higher-than-expected US inflation delivers a significant setback to Donald Trump ahead of November’s midterms as the ongoing Middle East conflict continues to impact the global economy.
