Gas hits $4.22 as GDP grows 3.4% ahead of Nov. 3 vote

The federal government released the final major economic figures ahead of the Nov. 3 midterm elections, revealing a split picture where robust growth coexists with high prices. The most recent data shows the economy expanded at an annualized rate of 3.4% for the three months ending in September, the fastest pace since mid-2024.

This acceleration follows growth of 2.2% and 2.5% in the two preceding quarters, according to the U.S. Commerce Department. The expansion is largely driven by a surge in spending on artificial intelligence, which contributed 0.56 percentage points to GDP growth in the first half of the year, according to J.P. Morgan Asset Management.

Despite the top-line growth, the cost of living has risen sharply. The annual inflation rate stood at 3.7% in September, more than a percentage point above the Federal Reserve's 2% target. Prices are rising faster than wages, a trend that began in April and has reduced the spending power of American workers.

Gasoline prices have become a focal point for voters frustrated by household budgets. The average price for a gallon of regular unleaded gas was $4.22 on Thursday, a $1.19 increase from the same time last year, according to AAA. Diesel fuel averaged $6.33 per gallon, up $2.65 year over year.

The spike in fuel costs follows the war in Iran, which pushed energy prices higher. In a poll conducted by ABC News, The Washington Post, and Ipsos, 71% of respondents described gasoline as unaffordable, up from 28% in February. Half or more of Americans in that survey said every category of household purchase measured was currently unaffordable.

Consumer confidence has followed the prices down. The University of Michigan's monthly survey, released last week, placed consumer sentiment at the second-lowest level in the survey's 74-year history. Shoppers in the survey expect inflation to worsen over the next year.

President Donald Trump addressed the economic conditions at a rally in Corinth, Miss., on Monday. He described the U.S. economy as experiencing "unbelievable growth, the biggest growth in the history of our country." Acknowledging the higher oil prices, he stated that the war with Iran was necessary to prevent Iran from acquiring a nuclear weapon.

"I don't want to belittle it because it's a big thing but I thought the price of oil was going to go much, much higher and I was fully prepared to do it," Trump said.

The labor market shows stability in the aggregate but volatility in the monthly data. The U.S. added an average of 68,000 jobs per month over the first nine months of 2026, an improvement from the 10,000 monthly average seen in 2025, according to the Atlanta Federal Reserve. However, job growth slowed sharply in September, with employers adding only 29,000 positions after adding 133,000 in August.

The unemployment rate has remained at 4.4% or lower since 2017, excluding the pandemic years of 2020 and 2021, according to the Bureau of Labor Statistics.