Rising prices outpace US wages as cost of living tops midterm concerns

Rising prices are outpacing wage growth in the United States, leaving millions of households stretched as voters weigh living costs before the midterm elections, according to labour data and polling cited by Al Jazeera.

Stacy Eichel, a Florida resident whose children have grown up and moved out, lost her marketing job at a healthcare company in September 2025 after a merger. The custom-branded merchandise business she ran on the side — mugs, T-shirts and other corporate giveaways — had to carry more of the burden of supporting her just as demand for it shrank. Companies uncertain about tariffs and trade policy, and spending more on artificial intelligence, have been trimming discretionary budgets, and branded promotional items are an easy expense to drop.

"The economy is such that fewer people are buying custom-branded swag because it's more of a luxury item," Eichel told Al Jazeera. She has cut back on dining out, takeout and cable television: "I never used to think before ordering in, and now we cook everything."

Underemployment stays high

The headline unemployment rate counts only people actively looking for work. The Labor Department's broader U-6 measure, which includes people working part-time because they cannot find full-time jobs and those who have stopped looking recently, stands at 7.6 percent — down from 8.1 percent a year earlier but still elevated. An estimated 4.5 million Americans work part-time for lack of full-time work, and nine million hold more than one job, or 5.5 percent of all employed workers.

"Underemployment is one of the most misunderstood economic problems in America because it doesn't always look like unemployment," workforce strategist Tara Furiani, who is based in Richmond, Virginia, told Al Jazeera.

Average hourly wages rose 3 percent over the past year while consumer prices rose 3.7 percent, the latest Consumer Price Index report shows. On the month, prices climbed 0.6 percent against a 0.1 percent rise in wages.

Cost of living tops voter concerns

A Reuters/Ipsos poll found the cost of living was voters' most important issue at 47 percent, ahead of "democratic norms and values" at 22 percent. A Washington Post–ABC News–Ipsos poll found voters trusted Democrats over Republicans to handle the economy by 40 percent to 33 percent — the first Democratic advantage on the issue in 12 years. Pew Research Center polling released this month found 44 percent of Americans had struggled to pay for at least one basic necessity over the past year, and 20 percent had received food from a food bank or pantry.

Joshua Teicher, a New York City video producer in the advertising industry, said work dried up after the COVID-19 pandemic and has now nearly stopped. He is on Medicaid, struggles to afford prescriptions and food, and cannot pay for the knee surgery he needs on his left leg; he had his right knee repaired earlier, leaving one leg slightly longer than the other.

Petrol prices add to the pressure. A gallon averaged $4.29 on Monday, up from $2.98 when the US and Israel first struck Iran in late February, according to AAA.

Economists describe a "low-hire, low-fire" market: employers are hesitant to recruit, layoffs remain relatively low, and the latest JOLTS report showed job openings and quits little changed. Babak Hafezi, a professor of international business at American University, told Al Jazeera he has seen highly qualified people unable to find work for 12 to 18 months. Debbie Louis, who owns a coffee shop in Brooklyn, said teachers and people in other fields keep asking about part-time hours.

The Conference Board's latest consumer confidence report found higher-income households, buoyed by investment gains and savings, were more optimistic than other income groups — a divide Hafezi described as a "K-shaped" economy.

Source: Al Jazeera.