Growth, Jobs, Unemployment by State and the Stock Market, Measured Against Past Recoveries
With nine days to go before the midterms, every campaign has a story about the economy. I wanted to see what the numbers themselves say, so I went through the latest readings on growth, jobs, prices, interest rates, stocks and consumer mood, and put each one next to where it stood a year ago and next to history.
The short version: this is not a recession, and it does not feel like a boom either. Growth has held up, layoffs are low, unemployment is low and the stock market is near a record, even though hiring has slowed to a crawl. But prices are rising faster than paychecks again, and Americans feel worse about the economy than at almost any time on record.
The Midterm Economy: How the US Is Really Doing Before the 2026 Vote
Growth, jobs, prices, the yield curve, the stock market and the mood of the country, checked against history in the last days before the November 3 election.
00The Charts
Tap a chart to jump to it.
01The Scorecard
Ten readings, each next to where it stood a year earlier. Most of the classic recession alarms are quiet. The two that are not are prices and how people feel about them.
| Indicator | Latest | A year earlier | What it says |
|---|---|---|---|
| Unemployment rate | 4.2% (September 2026) | 4.4% | Steady. It has stayed between 4.1% and 4.3% since March. |
| Jobs added, 3-month average | +51k a month | +23k a month | Slow. Hiring is weak but not negative. |
| Sahm rule (recession trigger at 0.50) | 0.00 (September 2026) | 0.23 | No signal. |
| Yield curve, 10-year minus 3-month | +0.90 points (September average) | +0.05 points | Normal. The long inversion ended in December 2024. |
| Weekly jobless claims | 194,000 (week ending October 17) | 231,000 | Layoffs are low. |
| Real GDP growth, annual rate | 3.5%* (third quarter, estimate) | 3.9% | Growing. |
| Consumer prices, past 12 months | 3.7% (September 2026) | 3.0% | Rising faster. Core prices, without food and energy, 2.6%. |
| Paychecks after inflation | -0.7% over 12 months | - | Falling since the spring. |
| Consumer sentiment (University of Michigan) | 48.0 (October 2026) | 53.6 | Near the record low. |
| Federal funds rate | 3.75% to 4.00% | 4.00% to 4.25% | The Fed raised it in September. |
Latest readings as of October 25, 2026, except where noted. Sources: Bureau of Labor Statistics, Bureau of Economic Analysis, Federal Reserve, Department of Labor, University of Michigan. * The third-quarter 2026 figure is the Federal Reserve Bank of Atlanta's GDPNow estimate as of October 20, 2026, not an official number. The Bureau of Economic Analysis publishes its advance estimate on October 29, 2026.
The Recession Dashboard tracks eleven of these signals every day, with a plain verdict for each and its track record since its data began.
02The Recession Clock
Two of the most watched recession signals, plotted against each other month by month since 1982: the yield curve on one axis and the Sahm rule on the other. Every recession in that time started with the curve inverted first and the Sahm rule climbing after.
The curve gave its warning: the 10-year Treasury yield was below the 3-month rate continuously from October 25, 2022 to December 12, 2024, one of the longest inversions on record. The Sahm rule then crossed its 0.50 trigger in the summer of 2024. And yet the National Bureau of Economic Research, the official referee, has not declared a recession since the one that began in February 2020. In September 2026 the Sahm reading was 0.00 and the curve was comfortably positive. This chart updates on its own each month; the recession history page has every downturn since 1900.
03Growth
Real GDP growth by quarter, seasonally adjusted annual rate. Source: Bureau of Economic Analysis (second-quarter 2026 third estimate, September 30, 2026). * The third-quarter 2026 figure is the Federal Reserve Bank of Atlanta's GDPNow estimate as of October 20, 2026, not an official number. The Bureau of Economic Analysis publishes its advance estimate on October 29, 2026.
The economy has grown in every quarter shown, though unevenly: a near standstill at the start of 2025 when imports were rushed in ahead of tariffs, two strong quarters in the middle of the year, a slump at the end of 2025 during the shutdown, then 2.5% and 2.2% in the first half of 2026. For the third quarter, the Atlanta Fed's GDPNow model estimated growth of 3.5%* at an annual rate as of October 20, shown as the dashed bar; the official first estimate is due on October 29, 2026, five days before the vote.
04Jobs
Monthly change in nonfarm payroll jobs, October 2024 to September 2026, in thousands. Source: Bureau of Labor Statistics, Employment Situation (September 2026 report, October 2, 2026), via FRED.
Unemployment rate, seasonally adjusted. Source: Bureau of Labor Statistics.
This is the softest part of the picture. Employers added 29,000 jobs in September and an average of 51,000 a month over the past three months, and the summer numbers were revised down by a combined 60,000; July is now a loss. In the twelve months before September, the Bureau of Labor Statistics put the average at 45,000 jobs a month, a fraction of the pace of 2022 or 2023.
But companies are not laying people off in any number. First-time jobless claims were 194,000 in the week ending October 17, lower than a year earlier, and the unemployment rate has barely moved, at 4.2%. The recession history page has the dates, depth and cause of every recession since 1900.
05Unemployment, State by State
The five highest and five lowest state unemployment rates, September 2026 (preliminary, seasonally adjusted). The District of Columbia was 5.6%. Source: Bureau of Labor Statistics, state employment and unemployment release, October 20, 2026.
The map above runs month by month from 1976 and updates when each new state report comes out. In September 2026 the national rate was 4.2%, but the states ranged from 2.0% in South Dakota to 5.1% in California and Connecticut. The BLS counted significant increases from a year earlier in seven states, led by Connecticut, up 0.9 points, and significant decreases in 20 states and the District of Columbia. Michigan, Oregon and Arizona sit near the top of the list, which matters in a year when all three elect governors in races the Cook Political Report rates as competitive, and Michigan also has an open Senate seat. Every state's history is on the state unemployment rates page.
06Prices Against Paychecks
For most of the past two years paychecks grew faster than prices. That flipped in April 2026: consumer prices rose 3.7% in the twelve months to September 2026 while average hourly pay rose 3.0%, so the typical worker's pay buys less than it did a year ago. Core prices, which leave out food and energy, rose a milder 2.6%, which tells you where the pressure is coming from: energy, above all gasoline. Regular gasoline averaged $4.28 a gallon in the week of October 19, 2026, $1.27 more than a year earlier, according to the Energy Information Administration.
The energy squeeze has a geography. Tanker traffic through the Strait of Hormuz has been cut to a fraction of normal since early March 2026, apart from a brief recovery in June, which you can watch week by week on the Shipping Chokepoint Monitor. I traced where each dollar at the pump goes in Where Every Dollar You Spend on Gas Actually Goes, and the oil crisis history page puts this one next to every shock since the 1956 Suez crisis.
07The Fed Turns Around
A year ago the Federal Reserve was cutting interest rates; it cut three times from September to December 2025, ending at a range of 3.50% to 3.75%. With inflation picking up again it reversed course on September 16, 2026, raising the range to 3.75% to 4.00% in a unanimous vote, after three officials had dissented in July in favor of a hike. Its next decision is on October 28, the week before the election.
Long-term rates have moved even more. The 10-year Treasury yield closed above 5% on almost every trading day of October 2026, peaking at 5.31% on October 5, and it is the benchmark that mortgage rates follow. I explained how a Treasury yield turns into a mortgage payment in How a Treasury Yield Becomes Your Mortgage Payment, and the Mortgage Calculator shows what today's rates mean for a monthly payment.
08Stocks
Wall Street has not been reading the gloomy surveys. The S&P 500 closed at a record on October 6, 2026, and closed on Friday, October 23 at 7,623.68, up 11.4% for the year. That is a long way from April 2025, when the index fell 18.9% from its February high in seven weeks around the tariff announcements before recovering.
History says the market tends to do well after midterms whoever wins; I went through every one since 1946 in Stocks After Midterm Elections: 80 Years of Data. The Biggest Stock Market Crashes page shows how the April 2025 drop compares with every major crash, and $10,000 Invested in 1980 shows what staying invested through every crash since then was worth.
09How Americans Feel About It
University of Michigan index of consumer sentiment (1966 = 100). Source: University of Michigan Surveys of Consumers.
Here is the gap that matters for the election. By the hard numbers this is a slow-hiring economy with low unemployment and a stock market near its record. By the soft numbers it is a bad one. The University of Michigan's sentiment index was 48.0 in October 2026, close to the all-time low of 44.8 it hit in May, and well below 53.6 a year earlier. Households expect prices to rise 4.7% over the next year.
That is the usual pattern when prices outrun pay: people judge the economy by the grocery bill and the gas pump, not by the unemployment rate.
10Does the Economy Decide Midterms?
October unemployment rate (1946: annual average) against the House seats gained or lost by the president's party at each midterm election, 1946 to 2022. Sources: Bureau of Labor Statistics; American Presidency Project.
Less than you might think. The president's party lost House seats in 18 of the 20 midterms since 1946, in good economies and bad. In 1966 unemployment was 3.7% and Lyndon Johnson's Democrats lost 47 seats; in 2018 it was 3.8% and Donald Trump's Republicans lost 41. The two exceptions, 1998 and 2002, came in very different economies, a boom in 1998 and a weak recovery in 2002. Across all twenty, the link between the jobless rate and the seat count is close to zero.
Weak growth does seem to make things worse: in the six midterm years when real GDP grew less than 1% for the year, the president's party lost an average of 35 seats, against 22 in the other fourteen. Political scientists have argued about this for fifty years; Edward Tufte tied midterm results to income growth and presidential approval in 1975, while Robert Erikson concluded in 1988 that most of the loss is a penalty on the president's party whatever the economy does. I looked at the approval side in The 10 Most Unpopular Presidents Heading Into a Midterm - And What Happened Next, and the midterm elections history page has every result back to 1862. For this year's odds, see the 2026 Midterm Forecast and the Midterm Money Tracker.
→What to Watch
| Date | Release |
|---|---|
| October 27-28, 2026 | Federal Reserve interest rate decision |
| October 29, 2026 | Third-quarter GDP, first estimate, and September personal income and spending (PCE prices) |
| November 3, 2026 | Election day |
| November 6, 2026 | October jobs report |
The Recession Dashboard and the Daily Federal Spending Tracker update as these come in. The government's side of the ledger for the year just ended is in Where the Money Went: Fiscal 2026.
The recession that the yield curve warned about for two years has not shown up. The economy is still growing, unemployment is 4.2% and layoffs are low. What has shown up is inflation, led by energy, and with it paychecks that buy less than a year ago and consumer moods near record lows. Polls suggest the second set of numbers is the one voters are feeling.
§Sources
- Bureau of Labor Statistics: Employment Situation (September 2026), Consumer Price Index (September 2026), State Employment and Unemployment (September 2026), Real Earnings
- Bureau of Economic Analysis: Gross Domestic Product
- Federal Reserve Bank of St. Louis: FRED (UNRATE, PAYEMS, CPIAUCSL, CES0500000003, SAHMREALTIME, T10Y3M)
- Federal Reserve: FOMC statement, September 16, 2026
- US Department of Labor: Unemployment Insurance Weekly Claims (October 22, 2026)
- US Energy Information Administration: Gasoline and Diesel Fuel Update
- University of Michigan: Surveys of Consumers
- National Bureau of Economic Research: US Business Cycle Expansions and Contractions
- American Presidency Project: Seats in Congress Gained/Lost by the President's Party in Mid-Term Elections
- Edward Tufte, "Determinants of the Outcomes of Midterm Congressional Elections," American Political Science Review (1975); Robert Erikson, "The Puzzle of Midterm Loss," Journal of Politics (1988)
Filed under: General Knowledge
