High gas prices are harming many Americans, forcing them to cut back or reduce their savings.

On Thursday, the U.S. Commerce Department release data showing that retail sales rose 0.8 percent in September to US$745 billion, largely driven by higher gasoline prices that boosted consumer spending at gas stations.

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Excluding sales at gas stations, retail sales increased just 0.2 percent during the month, suggesting underlying consumer demand remained subdued.

While rising retail sales are generally seen as a sign of economic resilience, analysts said the September increase offered a less encouraging picture of consumer spending, as higher fuel costs accounted for much of the growth.

“Retail sales definitely looked weak in September,” said Dean Baker, a macroeconomist and co-founder of the Center for Economic and Policy Research. Experts also noted that high gas prices are harming many Americans, forcing them to cut back or reduce their savings.

Mike Johnson:

“Everybody’s frustrated about fuel prices, but that’s not related to policies. It’s not related to the Republicans. This is related to the Strait of Hormuz.”

It is absolutely related to policy and Trump’s war on Iran, which Republicans wholly support. He is a…

— Power to the People ☭🕊 (@ProudSocialist) October 12, 2026

Gary Hufbauer, a nonresident senior fellow at the Peterson Institute for International Economics, said: “About 50 percent of households are living paycheck to paycheck, and if they are squeezed by gasoline prices, they have to cut back elsewhere. But the other 50 percent just reduce their savings to pay for higher gasoline prices.”

High energy prices could create a new wave of inflation. “The longer energy stays elevated, the more likely it generates a new wave of inflation. Another six months would run this risk,” Hufbauer said.

The data were released just weeks before November’s midterm elections, at a time when underlying prices are already high and gasoline prices threaten to make matters even worse. Republicans could take a beating at the polls over voters’ displeasure with high prices that show no sign of coming down.

However, even if Democrats take control of Congress, the party will have its work cut out after the dust settles, as pushing down gas prices means finding a solution to the war in Iran, which seems improbable at the moment.

At the same time, underlying inflation continues unabated. Experts said getting back to pre-COVID price levels requires the Fed to step in and raise interest rates. However, the central bank has shown no desire to hike rates to the 5 percent level, or higher, that economists say is needed to tame inflation.

Some experts noted that the GOP is caught between a rock and a hard place. Brookings Institution Senior Fellow Darrell West said, “Republicans are caught between fighting inflation and a slowing economy, which is a big problem for them in November.”

“Gas prices should drop when the Iran War ends, but it is not clear how (Donald) Trump brings that conflict to a reasonable conclusion,” West said.

teleSUR/ JF

Source: Xinhua

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