At least President Trump isn’t fudging the data, as critics once feared. If he was ever going to suppress grim economic news, it would be right before the midterm elections.
Instead, Trump is mostly trying to change the subject and hoping voters don’t notice that inflation is once again eroding paychecks and making life difficult. Many voters, however, can’t help but notice.
Inflation jumped from 3.4% in August to 3.7% in September. At the start of 2026, it looked like inflation might get back to normal this year. But now it’s causing problems ranging from higher interest rates to strained household budgets.
We’ll use some charts to tell the story.
Wage growth is just 3%, so with inflation at 3.7%, real income growth, adjusted for inflation, is negative. Inflation has exceeded wage growth for most of 2026, which means the average paycheck buys less and the typical worker is falling behind. For the incumbent political party, that’s a formula for electoral disaster.
Everybody knows about surging energy prices, triggered by the Iran war Trump started in February and Iran’s ongoing disruption of Persian Gulf energy exports. Trump said recently that he made a deal with Russia to bring more diesel fuel onto the market, an obvious effort to lower prices. It hasn’t worked and may even backfire. Trump is now facing mounting opposition from within his own party for going soft on Russia and helping it earn more revenue to finance its brutal war with Ukraine.
Rising inflation is showing up now as higher costs for energy and things related to energy, such as airfares and other types of transportation. But those sky-high diesel prices will likely cause higher future prices for harvested food, transported goods, and other things dependent on diesel. Grocery inflation has tapered off to a mere 1.8%, but food inflation might be heading back up.