Despite the U.S. economy expanding at nearly 4 percent in the third quarter, President Donald Trump faces declining approval ratings and significant challenges as the November midterm elections approach. This disconnect between robust economic growth and political support is fueling concerns for the Republican Party, which betting markets now see as vulnerable to losing control of both houses of Congress—a rare outcome under such favorable economic conditions since the 1950s.

The underlying tension stems from a widespread perception among many Americans that the current economic boom is not benefiting the majority. While overall GDP growth is strong, it is concentrated primarily among the wealthiest consumers and driven by substantial investments in artificial intelligence (AI), a sector that has sparked widespread anxiety and opposition among the general public. This unease has intensified in recent years, with voter dissatisfaction about the nation’s direction doubling to around 80 percent and concerns about the rising cost of living becoming paramount.

Housing and energy costs are cited as the greatest sources of economic strain. Recent geopolitical developments, including the war involving Iran, have constrained global oil supplies, contributing to a more than 40 percent increase in gasoline prices over the past year. At the same time, higher mortgage rates—now exceeding 7 percent—have made home ownership less affordable than at any time in the last two decades. Furthermore, the rapid expansion of power-intensive AI data centers has led to perceptions that these facilities are driving up utility bills, provoking local opposition to many proposed projects. Republicans face a difficult balancing act as President Trump has characterized attempts to slow such development as risking the nation’s economic future.

Public sentiment toward AI is notably negative compared to earlier technological shifts. Unlike previous innovations such as computers and the internet, which were largely embraced, AI is now viewed with apprehension, particularly among younger Americans concerned about potential job losses. In his push to link AI adoption and geopolitical competition with China, Trump is asking voters to accept higher prices and uncertainty as necessary trade-offs, an argument that conflicts with growing public unease.

Economic gains are unevenly distributed, with inflation-adjusted wages declining for most workers except those equipped with AI-related skills, who are commanding significantly higher salaries. Investment in AI-related sectors is growing at an annual rate of around 25 percent, whereas other industries are seeing little to no growth. This divergence has contributed to widening economic inequality, reflected in rising mortgage delinquencies concentrated in lower-income neighborhoods and stock market patterns that favor the wealthiest investors.

Historically, strong economic growth ahead of midterm elections has helped incumbent presidents maintain political support, with only one prior instance in 1954 of a president’s party losing both chambers under similar conditions. Should the Republican Party suffer such losses this year, it would mark a significant setback for Trump’s efforts to reshape the GOP around populist, anti-establishment themes. The evolving economic landscape, shaped by technological investment and uneven wealth distribution, underscores the complex challenges facing the administration as voter concerns extend beyond headline growth figures.