The economy is strong by conventional measures, but most voters don’t feel it. Gross domestic product grew 3.4 percent in the third quarter, the fastest pace in a year. Consumer spending increased 3.8 percent, and nonresidential business investment surged 12.7 percent, propelled by artificial intelligence and the data center build-out.
At the same time, the final Post-ABC News-Ipsos poll before the midterms found that 75 percent of Americans describe the economy as poor or not so good. Forty-eight percent say they’re financially not as well off since President Donald Trump took office, more than three times the 15 percent who say they’re better off. Fewer than 3 in 10 Americans approve of how Trump is handling the economy.
Democrats are favored to flip the House on Tuesday and have a real chance to capture the Senate. Persistent inflation, more than anything else, explains why the party in power is not receiving more credit for economic growth, low unemployment, deregulation, stock market gains and historic levels of capital investment.
Inflation has been a problem since Washington pumped trillions of dollars in stimulus into the economy during the covid pandemic. While inflation has cooled from its 9.1 percent peak in 2022, Trump has contributed to rising prices with unnecessary tariffs, an overzealous immigration crackdown and the Iran war, which has raised energy costs.
Inflation is a corrosive stealth tax that makes people feel like they’re not getting ahead. Average hourly earnings rose 3 percent over the past year, but consumer prices climbed 3.7 percent. As a result, real hourly earnings fell 0.7 percent. Gasoline jumped 9.1 percent in September and is now 34.2 percent more expensive than a year ago.
No wonder affordability is front and center. Nearly two-thirds of campaign commercials in competitive races last week mentioned the economy.
The squeeze is especially acute in districts that will determine House control. A Post analysis last week found that 6 in 10 families cannot afford the basic cost of living in the 46 most competitive districts. Between 2019 and 2024, median costs rose 33 percent while median incomes rose 28 percent. Incomes failed to keep pace with costs in 42 of the 46 districts.
Trump won in 2024 by promising relief from those pressures. Some of his policies are instead aggravating them. Take tariffs. Federal Reserve researchers found that tariffs imposed in 2025 raised core goods prices 3.1 percent through February. Yale’s Budget Lab estimated that the tariffs in place over the summer would raise consumer prices about 0.7 percent, costing the average household roughly $1,100 annually.
Immigration enforcement creates another artificial constraint on supply. In South Texas, construction payrolls have fallen 5 percent over the past year because of deportations that contribute to worker shortages. Cattle groups say sweeps by Immigration and Customs Enforcement are also disrupting the beef supply, including by frightening legal workers away from jobs.
The right solution to these frustrations is not to promise government checks, which would fuel inflation. Farmers need free markets, not government money compensating them for the consequences of tariffs.
An effective affordability agenda would remove government-created obstacles. Scrap tariffs that make imported goods and manufacturing inputs more expensive. Maintain secure borders while expanding lawful avenues for workers needed for farms, factories and construction sites. Remove permitting barriers so Americans can build more homes, factories, power plants and transmission lines. And encourage more domestic energy production.
Politicians in both parties need to be honest with voters about what taming inflation looks like. The Federal Reserve raised interest rates in September and may need to do so again to cool pricing pressures. Returning to the Fed’s 2 percent target will not bring groceries, rent or restaurant menus back to 2019 prices. Success means today’s high prices will merely rise more slowly.
The only sustainable way to actually restore purchasing power is for productivity and wages to grow faster than prices. Fortunately, last week’s GDP report offers evidence that this can happen if government gets out of the way. Businesses are investing enormous sums in new technology and productive capacity because they see opportunities to make money.
That is the paradox of today’s economy: Markets are producing significant growth while government policy makes life more expensive. The right response to bad midterm results for the White House would be to let rising productivity, rather than protectionism or government giveaways, make Americans richer.
The post The inflation election appeared first on Washington Post.
