US Midterms 2026: Why inflation could become Trump's biggest economic test

US President Donald Trump has repeatedly described the US economy as the strongest in history. But as the 2026 midterm elections approach, voters appear to be looking at a different set of numbers — the prices they pay for groceries, gasoline, electricity and other essentials.

A new Associated Press-NORC poll found that just 17% of Americans approve of Trump’s handling of the cost of living, while 26% approve of his handling of the economy overall. More significantly, 65% attribute persistently high prices to Trump’s policies.

The numbers point to a difficult political question for Trump: the US economy is still growing and unemployment remains relatively low, but inflation continues to shape how Americans experience that economy.

So, will inflation become the issue that decides the US midterms?

The Economy Looks Stronger On Paper

Trump has some strong economic indicators to point to.

US unemployment stands at 4.2%, while the economy grew at a 2.2% annualised rate in the second quarter, according to revised government data. Consumer spending and business investment have remained relatively strong, with investment in artificial intelligence also contributing to growth.

But the labour market has lost momentum. The US added only 29,000 jobs in September, while payroll figures for July and August were revised down by a combined 60,000, according to Reuters.

Michael Strain, director of economic policy studies at the American Enterprise Institute, has described the economy as strong, pointing to low unemployment, resilient consumers and strong investment. At the same time, he has acknowledged that inflation is eroding wages and income.

That is the tension at the heart of Trump’s economic record. The economy does not have to be in recession for households to feel financially worse off.

For many voters, the question is not whether GDP is growing. It is whether their incomes are keeping pace with the prices they face.

Why Inflation Still Feels High

The US inflation rate was 3.4% in August, up from 3% when Joe Biden left office.

The 3.4% annual inflation rate is far below the peak seen earlier in the decade. But prices do not need to be accelerating rapidly for households to feel pressure. They only need to remain high after several years of increases.

Over the past 12 months, fuel-oil prices have risen 52%, while ground beef has risen 7.2%, coffee 6.1% and electricity 3.8%. Egg prices, meanwhile, have fallen 23%.

The mixed picture is important. Some prices are falling, but many everyday expenses remain considerably higher than they were before the inflation surge.

Gasoline is particularly politically sensitive because consumers see the price every time they fill their tanks, while fuel costs also feed into transportation and other parts of the economy. About half of Americans told AP-NORC they were extremely or very concerned about being able to afford gasoline, up from 39% in July. A similar share expressed concern about affording food.

Consumer sentiment reflects that anxiety. A University of Michigan survey found sentiment in September had fallen to its second-lowest level in the poll’s 74-year history.

The Federal Reserve is also still dealing with the inflation problem. It raised its benchmark interest-rate target to 3.75%-4% in September, keeping borrowing costs elevated for households dealing with expensive mortgages and other loans.

Who Gets The Blame For Higher Prices?

The political fight is not only about whether inflation is high. It is about who voters think is responsible for it.

Trump has blamed high prices on the previous administration and external shocks, while his administration has pointed to falling prices for some goods. The White House has also argued that tax cuts, deregulation and other policies will produce stronger long-term growth.

But voters appear increasingly willing to connect prices to Trump himself.

The AP-NORC poll found that 65% attribute persistently high prices to Trump’s policies.

That is notable when compared with the political environment under Biden. In October 2022, when inflation was also a major concern, 44% of Americans blamed Biden’s policies for high prices, while 55% blamed factors outside his control, according to AP-NORC.

Trump’s current economic approval rating of 26% is also similar to Biden’s 28% approval rating on the economy in June 2022.

The difference is not necessarily that Americans are experiencing a completely different economic problem. It is that more voters now appear to be attributing high prices to the sitting president.

That could make inflation a more direct referendum on Trump’s economic policies.

Tariffs, Iran And The Price Problem

Two of Trump’s biggest policy decisions have added another layer to the inflation debate: tariffs and the war with Iran.

Trump has argued that tariffs will protect American industries, encourage domestic manufacturing and generate revenue. Critics argue that tariffs increase costs for businesses importing goods and components, some of which can eventually be passed on to consumers.

Only about three in 10 Americans approve of Trump’s handling of trade negotiations, according to AP-NORC, while 64% say he has gone too far in imposing tariffs on other countries.

The Yale Budget Lab estimates that Trump’s tariffs could cost the average American household about $1,100 this year. The White House disputes that assessment and argues that the longer-term benefits of tariffs, tax cuts and deregulation will outweigh their short-term costs.

The Iran conflict presents a different route through which policy can affect household finances.

Higher energy prices can spread through the economy because fuel affects transportation, manufacturing and the cost of moving goods. Mark Zandi, chief economist at Moody’s Analytics, has estimated that the average US household could spend about $1,000 more this year because of higher fuel, food and other prices caused by the Iran war.

The political reaction has also been negative. Only 28% approve of Trump’s handling of Iran, while 69% say the war has not been worth fighting, according to AP-NORC.

Tariffs and energy prices are therefore two areas where voters could connect decisions made by the Trump administration with what they pay at home.

Jobs Are Holding Up — But Hiring Is Slowing

The labour market provides Trump with one of his strongest arguments — but it is becoming less convincing as hiring slows.

Unemployment remains at a historically low 4.2%, and layoffs remain relatively limited. But the US added only 29,000 jobs in September, while job-hopping has declined and real disposable income growth remains modest as inflation offsets part of wage gains, Reuters reported.

Manufacturing also remains a mixed picture.

Trump promised that tariffs and deregulation would help revive US manufacturing. Yet manufacturing employment remains around 12.6 million jobs, about 21,000 below the level he inherited from Biden in January 2025, according to Reuters.

Instead, the US has a slower, more uneven economy in which employment remains relatively strong but opportunities and purchasing power are under pressure.

AI Is Lifting Growth, But Who Benefits?

Artificial intelligence has become an important part of the US growth story.

AI investment is supporting GDP growth, business spending and stock-market gains. But the benefits of that investment are not necessarily being distributed evenly.

Lindsay Owens of the Groundwork Collaborative argues that much of the economy’s strength is being sustained by AI investment and the spending power of wealthy Americans. She said the richest 10% of Americans account for nearly half of consumer spending, while lower-income households are increasingly squeezed.

AI is also creating new local economic battles, particularly around data centres and their demands for electricity and water.

That adds another layer to the broader question of whether strong headline growth is translating into an improved financial outlook for ordinary households.

Even Republicans Are Feeling The Pressure

Inflation is not simply a Democratic talking point.

Around six in 10 Republicans disapprove of Trump’s handling of the cost of living. At the same time, 67% of Republicans say factors outside Trump’s control are more responsible for high prices, according to AP-NORC.

The poll also found that 52% of Republicans say Trump’s handling of the cost of living has been worse than expected.

That distinction matters. Republican voters may be frustrated with prices without necessarily blaming Trump for them.

But persistent dissatisfaction could still make inflation a problem for the president’s party, particularly if voters begin to view the broader economy through the lens of their household finances.

Inflation Has Competition At The Ballot Box

Inflation is unlikely to be the only issue shaping the 2026 midterms.

Immigration remains one of Trump’s signature issues, while the Iran conflict has become both a foreign-policy and economic question. Concerns about Trump’s use of presidential power and government ethics are also part of the political debate.

AI is another emerging fault line, with voters concerned about its effect on jobs, regulation and household energy costs.

The economy therefore enters the midterms alongside several other issues competing for voters’ attention.

But inflation has one advantage politically: it can touch almost all of them.

Energy prices are linked to the Iran conflict. Tariffs can affect the cost of goods. Interest rates affect mortgages and borrowing. Slower hiring can make it harder for workers to increase their incomes. Even AI’s economic boom raises questions about who benefits from growth.

So, Will Inflation Decide The Midterms?

Inflation alone is unlikely to decide the 2026 midterms. But if voters continue to feel that prices are rising faster than their financial security, it could become the lens through which they judge Trump’s entire economic record.

The White House can point to a 4.2% unemployment rate, continued investment, resilient consumer spending and an economy that is still growing. The White House has also argued that some prices are falling and that the benefits of Trump’s policies will take time to emerge.

Voters, however, are not judging the economy only through GDP or unemployment.

Only 17% approve of Trump’s handling of the cost of living, 26% approve of his economic performance overall and 65% attribute higher-than-usual prices to his policies, according to AP-NORC. About six in 10 Americans also say the country is worse off than when Trump began his second term.

That does not mean voters will cast their ballots solely on inflation. But if prices remain a persistent source of frustration while the economy’s gains feel uneven, inflation could become the lens through which Americans judge everything else.

Trump is asking voters to look at the economy through unemployment, investment and growth. Voters may be looking at it through the prices they pay every day.