Gas prices were the Harris Poll’s most common pain point
The clearest divide in The Guardian’s Oct. 26 review of US economic data under Donald Trump’s second term was between pressure on household finances and continued gains in the stock market. Inflation, especially gas prices, had soared over the previous year, the job market was in stasis, and higher interest rates had made borrowing for loans and mortgages more expensive.
Gas prices brought the household side into focus. In a Harris Poll for The Guardian, 83% said they were making a dent in their current finances, making gas prices the most common pain point. A majority of Americans, including some Republicans, disagreed with Trump. Nearly two-thirds said they believed the country was experiencing a recession, and many said higher prices were a pain point. Respondents also reported having trouble saving, while a third said one surprise bill could sink them financially.
As the 2026 midterm elections approached, many Americans had the economy on their minds, and voters were exhausted by years of higher prices. Trump won the presidency in 2024 on promises to lower inflation and undo what he said the Biden administration had inflicted on the economy. At a recent rally in Montana, Trump framed the current economy as a booming time and said, “We’re richer now” and “We don’t have inflation.” The Guardian said economic data painted a different picture.
The rate of price increases had dramatically cooled since its peak in 2022, when the pandemic’s economic stimulus packages found their way into consumer prices. Inflation peaked at 9.1%, a 40-year high, in June 2022. It was 3% in January 2025, when Trump’s second term began, and fell to 2.3% by April, the lowest rate since 2021. After Trump placed tariffs on nearly everything the United States imports, inflation climbed back to 3% in September 2025. After many tariffs were paused and eventually found illegal, prices started falling again, bringing inflation to 2.4% in January and February 2026. It had been nearly six years since Americans had seen inflation at a manageable 2% level, and accumulated price increases continued to squeeze budgets.
The Iran war, specifically its impact on oil prices, brought inflation back to levels not seen since 2023. The rate reached 4.2% in May and had hovered above 3.4% since. Soon after the war in Iran began, the Strait of Hormuz, a key route through which a fifth of the world’s oil typically passes, was blocked off. Its closure pushed prices up around the world, and prices surged in the United States even though the country is a major oil producer.
AAA put the average price of gas at $4.32 a gallon in mid-October, nearly $1.30 a gallon higher than a year earlier. In oil-producing Texas, a gallon cost $3.81, compared with $2.64 a year earlier. California’s average was $6.21, and the state imports much of its gas from overseas.
A second divide ran between work and wealth. The labor market showed little momentum, though it had seen some growth since Trump returned to office and the figures fluctuated over the year. The US economy added 181,000 jobs in 2025, compared with 2.2m in 2024. Employers faced harsher immigration policies, uncertainty from tariffs and higher prices for supplies, all of which meant slow job growth. Unemployment remained low, at just over 4%, in what economists called a “low-hire, low-fire” economy in which employers were neither hiring nor laying off workers. FRED’s raw UNRATE series recorded the official U-3 unemployment rate at 4.2% as of Oct. 26, 2026. Against that backdrop, a small handful had never been wealthier as the stock market continued to soar after Trump took office. The market recovered from dips during the initial tariff announcement and the early days of the Iran war. Economists largely saw AI investment as the leading factor in the market’s acceleration. Technology companies were spending billions of dollars on datacenters and chips needed to power AI.
Many Americans hold stocks through retirement and pension funds, but The Guardian said the market’s growth had been a boon for the wealthiest 1%, who own nearly half of stock-market investments. Economists said higher prices paired with an exuberant stock market had produced a K-shaped economy, in which wealthier Americans had never felt richer while everyday Americans continued to deal with tightened budgets.
Interest rates are less noticeable to consumers than gas or grocery prices, but their effects take longer to appear and run deep. They shape how much Americans pay to borrow to run businesses, pay car loans and buy homes. The Federal Reserve uses rate changes to balance the economy: raising rates can cool the economy and bring prices down, though at the risk of hurting the job market; lowering rates can stimulate the economy at the risk of more inflation.
When Trump entered office in January 2025, the Federal Reserve was midway through a series of interest-rate reductions. Officials said they were seeing inflation cool and labor-market growth slow. Interest rates were at a range of 4.25% to 4.5%, 1% lower than a year earlier. Uncertainty around Trump’s new tariffs led officials to pause the reductions, even as the president demanded lower rates. As tariffs appeared to have less long-term effect on prices, the Federal Reserve started lowering rates again in fall 2025.
For months, the Federal Reserve held off on changing rates as the economic effects of the Iran war emerged. In September, it raised rates by a quarter point, the first increase since 2023. Trump-appointed Federal Reserve chair Kevin Warsh said that “inflation is too high and has been for too long.” The higher rates had already reached mortgages: the 30-year mortgage rate fell below 6% in February for the first time since 2022, then moved above 7%. FRED’s raw MORTGAGE30US series recorded 7.32% as of Oct. 26, 2026.
Taken together, the review described slower hiring and higher household costs weighing on many households while rising stock values benefited the wealthiest 1%. The Guardian said this divergence made inflation a sensitive point for voters as the midterms approached.