Inflation concerns rise before elections

The Bureau of Economic Analysis reported a 3.6% annual increase in the personal consumption expenditures price index in September, with a 0.5% monthly rise. This data has prompted worries at the White House about the state of the economy ahead of the midterm elections.

Consumption growth lags behind inflation

Household consumption expenditures rose by $113.1 billion in September, or 0.5% in value. However, when inflation is accounted for, the increase drops to just $2.6 billion, or less than 0.1% in volume, indicating weak real spending growth.

Savings rates decline significantly

Savings have fallen to $911.1 billion, or 3.8% of disposable income, a sharp decline from the 6 to 7% savings rate seen before the pandemic. This drop highlights a growing financial strain on households.

Inflation gap widens to 1.6 percentage points

The difference between US inflation and the Federal Reserve's 2% target has now reached 1.6 percentage points, the largest since the end of the post-pandemic inflationary period in 2022. This gap signals a challenge for policymakers aiming to control inflation.

Krugman links inflation to Trump policies

Nobel Prize-winning economist Paul Krugman has suggested using the term "trumpflation" to describe the current inflationary environment. He attributes this to policies such as tariffs and the war in Iran, which he claims have contributed to rising prices.

Tariffs and war drive up fuel prices

Gasoline prices have surged by 70% since the start of the conflict with Iran, reaching a record $6.52 per gallon on September 22. This increase is tied to the implementation of tariffs and the war launched in February 2025.

Fuel costs dominate election campaign

Polls and major electoral advertisements show that fuel prices and the cost of living are the central issues in the campaign. With the midterm elections just four days away, these concerns are shaping voter sentiment and political messaging.

Americans consume more fuel than average

According to calculations by a magazine, Americans consume nearly five times more gasoline and diesel per year than the average resident of the Union. This high consumption rate exacerbates the impact of rising fuel prices on households.