{"id":16762,"date":"2026-10-29T16:44:44","date_gmt":"2026-10-29T16:44:44","guid":{"rendered":"https:\/\/www.rbc.com\/en\/economics\/?p=16762"},"modified":"2026-10-29T16:59:30","modified_gmt":"2026-10-29T16:59:30","slug":"the-economic-pressures-shaping-the-2026-midterms-in-five-maps","status":"publish","type":"post","link":"https:\/\/www.rbc.com\/en\/economics\/us-analysis\/us-featured-analysis\/the-economic-pressures-shaping-the-2026-midterms-in-five-maps\/","title":{"rendered":"The economic pressures shaping the 2026 midterms in five maps"},"content":{"rendered":"\n
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US economic growth remains resilient in the face of tariffs, energy shocks, and lingering uncertainty, but consumers\u2019 confidence is not reflecting the economic data.<\/p>\n\n\n\n

Sticky inflation and slowing wage growth are top of mind for voters ahead of the Nov. 3rd midterms. Consumer prices have increased 5.4% since January 2025, but average hourly earnings are barely keeping up with 5.5% growth over the period.<\/p>\n\n\n\n

For households that depend on a paycheck, the economic challenges are clear: staying employed has not necessarily meant staying above water. In recent polls, 84% of respondents called the cost of living one of their most important issues. Of these, 74% say their cost of living is heading in the wrong direction.<\/p>\n\n\n\n

These concerns have mounted all while the hard metrics tell another tale: GDP is growing above trend, consumer spending remains robust, layoffs trudge along at ultra-low levels, and we\u2019ve seen a stable unemployment rate over the past year. Despite healthy metrics, consumers have never felt worse about their circumstances. The University of Michigan\u2019s preliminary October sentiment index fell to 46.3 from 48.1 in September, depressing the metric further than the troughs seen during the inflationary crisis of the 70\u2019s, the financial crisis of 2008, and even the COVID pandemic.<\/p>\n\n\n\n

Recent household experiences and sentiment differ across the country. Below we examine how income, spending, unemployment, inflation, and bankruptcies have performed across the country as a way to understand how voters\u2019 concerns may be expressed at the polls next week.<\/p>\n\n\n\n

Stable unemployment, but not for all<\/h3>\n\n\n\n

Recoveries have taken place in unemployment metrics, such as headline unemployment, the job finding rate, and the incidence of working part-time due to economic reasons. Oklahoma, Florida, Minnesota and Connecticut each showed more than a full percentage point increase in their state unemployment rates, which may have caused frustration and income loss for households living there.<\/p>\n\n\n\n

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Weak growth in personal income reflects a worried consumer<\/h3>\n\n\n\n

In Q3, consumer spending accelerated to 3.8% despite flat real disposable income increasing by only 1.3%. The broader trend has been a declining personal saving rate that sits below 4.0% for the first time since 2022. Our assessment is that this leaves affordability politically potent even without an economic slowdown or widespread layoffs. Southern and Southwestern states showed losses in real personal income which are reflective of increases in unemployment. But higher regional costs are a factor, and North Dakota and Wyoming stand out, with both having lost purchasing power despite an improvement in the unemployment rate.<\/p>\n\n\n\n

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Electricity prices are a visible issue<\/h3>\n\n\n\n

A main contributor to the affordability story is the price of electricity. On a cumulative basis from Jan 2025 to September 2026, household electrical prices rose 5.3%, and added more than an entire percentage point to headline inflation. The Midwest region has been especially burdened this term, with household electrical services prices increasing by more than 20%. This is tied to the AI data center build out and will be worth monitoring how states handle data center development heading into 2027.<\/p>\n\n\n\n

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