Business, Finance & Tech
Inflation Outpaces Wage Growth as Cost of Living Remains Top Concern Ahead of Midterm Elections
The latest snapshot of the U.S. economy shows continued growth, but rising prices remain a major concern for Americans heading into the midterm elections.
New federal data released Thursday show gross domestic product grew faster than expected in the third quarter, supported by strong consumer spending.
But economists say the strength of the economy has not eased the financial pressure many households are feeling.
Mark Hamrick, chief economic analyst at The Hamrick Brief, says the economy continues to demonstrate resilience. However, consumers are still dealing with the effects of prices that have climbed to higher levels.
The Federal Reserve’s preferred inflation gauge rose 0.5% in September, bringing annual inflation to 3.6%. That remains well above the central bank’s 2% target.
The Federal Reserve held interest rates steady Wednesday, allowing more time for the effects of its September rate increase to work through the economy. The central bank faces the challenge of controlling inflation while avoiding additional strain on the job market.
Federal Reserve Chairman Kevin Warsh noted that interest rates affect nearly every part of the economy, both directly and indirectly.
The labor market also faces uncertainty. Sneha Puri, an economist with Indeed Hiring Lab, says employers may become more hesitant to hire when economic conditions are uncertain, potentially creating additional challenges for job seekers.
The Federal Reserve is scheduled to meet again in December. Hamrick says another rate increase could be possible before the end of the year.
He also points to the growing gap between wages and prices, saying workers' pay is not increasing as quickly as the cost of living.
As voters head to the polls, affordability and the economy remain central concerns for Americans.
By: NBC Palm Springs
October 29, 2026
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