Republicans head into the upcoming midterm elections facing the highest inflation levels since the spring, following a government report released on Wednesday. Data from the Bureau of Labor Statistics indicates that the annual inflation rate climbed to 3.7% in September, up from 3.4% in August. This represents the highest level of price growth since May, when the rate peaked at 4.2% over a three-year period. This final inflation report before the pivotal midterm elections comes amid polls showing widespread dissatisfaction with the Trump administration over the cost of living. Air travel, which many Americans rely on during the holidays, also increased by 22.4%. 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.
Economic pressure remains a primary concern for voters, with consumer prices rising 0.6% in September alone compared to August. Core inflation, which excludes volatile food and energy costs, also saw a monthly increase of 0.3%, reaching an annual rate of 2.6%. September’s figures mark the highest inflation rate recorded before a midterm election since 1990, excluding the pandemic era. As rising gasoline prices and persistent inflation have eaten into household budgets, the economy has consistently been cited as a top issue for American voters.
Energy costs are identified as the primary driver of this trend, largely influenced by the US-Israel conflict with Iran. Gasoline prices have risen by 34% compared to last year, contributing to more than half of the total price increases. Additionally, fuel oil costs have surged by 74%, creating significant financial concerns for households entering the winter season. The impact of the conflict in the Middle East has burdened US consumers with an estimated $133 billion in costs, averaging over $1,020 per household, according to data from Brown University. Fuel oil, which is used to heat homes, increased by 74% from last year, a worrying sign for households heading into the winter. Which powers domestic supply chains, reached a record high last month, meanwhile diesel.
A recent Reuters/Ipsos survey reveals that 78% of Americans hold the current administration responsible for inflation rates that exceed wage growth, a sentiment shared by 57% of Republican supporters. In response to the economic climate, the Federal Reserve hiked interest rates last month for the first time since 2023. These higher rates have pushed the 30-year mortgage rate to 7.40%, further impacting home ownership costs.
During a rally in Wasilla, Alaska, on Tuesday, Donald Trump defended his economic record, characterizing his support for families as “substantial.” Addressing the focus on affordability, he remarked, “Every time they want to try and get me, they say ‘affordability’.” Previously, the former president suggested on social media that attacks by Yemen’s Houthi group on Saudi Arabia were a coordinated effort to drive up oil prices ahead of the US elections.
Richard Carter, head of fixed interest research at Quilter Cheviot, noted that the higher-than-expected inflation data poses a significant challenge for the administration. He described the situation as a blow to the president, who has struggled to demonstrate control over price levels despite attempts to stabilize the market by allowing Russian diesel imports. Ultimately, analysts suggest these measures have arrived too late to offset the economic grip maintained by the ongoing Middle East conflict. Who control Congress and the White House, much of the anger is expected to be directed at Republicans. The White House did not immediately respond to a request for comment on the latest inflation report.
