Current Affairs Of Pakistan & World: An economic report for everyone

An economic report for everyone

Oct 29, 2026

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THE CATCH-UP

There’s something for everyone to love — and worry about — in the final big pre-election temperature check of the economy.

GDP in the third quarter rose 3.4% annually, a higher rate of economic growth than analysts had expected, the Commerce Department reported today. Consumer spending held steady at 3.8% annual growth, while there was a massive surge in business investment.

The upshot: Despite a number of major pressure points, from the Iran war to mass deportations to tariffs, the economy overall remains fairly solid heading into the election.

“The country is doing unbelievably well,” President Donald Trump told reporters en route to his rally in South Carolina today.

On the flip side: The Personal Consumption Expenditures index, the Fed’s preferred measure of inflation, sped up in September, per the latest report. Prices surged 3.6% annually, well above the central bank’s 2% target, and rose 0.5% monthly. Core inflation, without volatile food and fuel, hit 3.1%. Both measures were the highest since the spring. At the same time, personal income growth slowed down a notch to 0.2% monthly.

Taken together, the data paints an economic picture that’s looked awfully familiar for years now: inflation squeezing Americans (now driven by the war under Trump) even as other parts of the economy hold firm. The trouble for Republicans is that going back to the Biden administration, voters have repeatedly proven unwilling to set aside their unhappiness with the former, regardless of the latter — so incumbents are in trouble politically. Trump’s inflation problem is only getting worse. And even though people are still spending, many Americans daunted by cost-of-living challenges are struggling to get by.

New Gallup polling out today shows the economy remains the No. 1 issue for voters in the midterms. Half the country says it’s extremely important for their vote, and another 37% call it very important. Compared to 2018, the last Trump midterm, the economy is significantly more salient. Iran now comes in at No. 3, and gas prices at No. 5. Health care is also near the top of the list.

Among the contradictions of this election is that if Republicans can blunt Democratic momentum thanks to overall economic strength, they’ll do so on the backs of one of the most hot-potato issues: AI. The artificial intelligence boom — all that data center infrastructure and more — was a major driver of overall GDP growth in the third quarter, actually outstripping consumption as a contributor.

But the data center backlash has never been more politically powerful. Texas Gov. Greg Abbott’s pivot away from embracing data center builds is pushing companies to consider fleeing to Utah, Georgia or Iowa instead, Bloomberg’s Shruti Singh and colleagues report. Dozens of jurisdictions, particularly in Ohio, will ask voters next week whether to block data center development, per Reuters. And ironically, robocalls powered by AI and funded by AI company CEO Elon Musk are now attacking James Talarico for his alleged support from “data center special interests,” CNN’s Em Steck and Andrew Kaczynski report.

The bigger picture is that “the tacit alliance between Silicon Valley and Washington is poised to unravel quickly,” Bloomberg’s Courtney Subramanian and colleagues report.

Both economic reports out today will also likely put pressure on the Fed to raise interest rates at its next meeting in December, though central bankers held them steady this week. The ongoing need to bring down inflation — and reduced worry about tamping down the economy — may nudge the policymakers into cranking up rates again, despite Trump’s disapproval.

Good Thursday afternoon. Thanks for reading Playbook PM. Drop me a line at eokun@politico.com.

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8 THINGS YOU NEED TO KNOW

1. SPY GAMES: U.S. intelligence determined that a woman close to Nvidia CEO Jensen Huang was a Chinese intelligence asset, raising fears of a spy plot that could be giving China crucial information about semiconductor chips, NYT’s Jonathan Swan and colleagues revealed. But Trump decided last year not to act on the findings about Huang, a close ally of his. Nvidia plays a crucial role in the U.S.’ AI boom and competition with China, so some White House officials worried about intelligence getting back to Beijing via the woman, Alice Huang. Nvidia said her company, Megaspeed, gets “ordinary business information — not sensitive Nvidia trade secrets — and zero information relevant to national security.”

2. TOP TALKER: In 2016, federal investigators “found some evidence” that Rep. Ilhan Omar’s (D-Minn.) marriage was fraudulent, but prosecutors dropped it due to the statute of limitations, NYT’s Ernesto Londoño reports from Minneapolis. The revelation comes as the Trump administration now probes Omar over similar questions seemingly related to whether it was marriage fraud to help her brother get to the U.S. Omar’s office slammed the allegations as a “baseless, disgusting conspiracy theory” that she has repeatedly decried as untrue.

3. ALASKA LATEST: “Republican committee chair wants testimony from operatives accused of meddling in Alaska Senate race,” by POLITICO’s Chris Marquette: “House Oversight Chair James Comer said Thursday he’s launching an investigation into allegations that the campaign of former Rep. Mary Peltola, the Democratic candidate for Senate in Alaska, played a role in recruiting candidates with a similar name to her GOP opponent, Sen. Dan Sullivan, in order to confuse voters in Tuesday’s election.” Comer requested interviews with Elisa Rios and Jerid Kurtz.

And the Justice Department has issued a round of subpoenas “targeting Democratic officials believed to be tied to the effort to recruit Daniel J. Sullivan to appear on Alaska's ballot,” ABC’s Katherine Faulders and colleagues report.

4. 2028 WATCH: Rep. Tim Burchett (R-Tenn.) would like to be appointed to the Senate if Sen. Marsha Blackburn (R-Tenn.) wins the governor’s race — but even if he’s not, he’ll jump into a campaign for the seat in 2028, Punchbowl’s Em Luetkemeyer reports. Rep. Chuck Fleischmann (R-Tenn.) also says he’s interested in the appointment (but won’t run if he doesn’t get it).

Special Coverage of Milken’s Future of Health Summit

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5. TRAIL MIX: The latest batch of CNN polls looks good for Democrats. Their Senate nominees lead by 4 to 7 points in Michigan, Texas, Maine and Kansas, though the latter two are essentially too close to determine a leader. Trump has now canceled his rally in Salina, Kansas, on Saturday, as the White House says it’ll be smarter for him to hold multiple “tele-rallies” instead, per CNN’s Kevin Liptak.

Big money: Defend the Vote Action Fund is plunking down $19.2 million for Democratic get-out-the-vote operations in Michigan, Ohio and Texas, CNN’s Patrick Svitek scooped. … The election spending disparity between gun lobby groups and gun reform groups has entirely flipped from a decade ago, The Trace’s Chip Brownlee reports: Organizations like Everytown for Gun Safety and Giffords are now vastly outpacing groups like the National Rifle Association.

Watching the watchmen: A top Justice Department official said in court that its election monitors at the polls will not come from the FBI or ICE. More from NBC

Afternoon read: “Trump Played a Magic Trick on the Midwest. Is It Still Working?” by Rolling Stone’s Stephen Rodrick: “On the road in Ohio and Michigan, where an insurgent crop of Democrats threaten the president's hold on the heartland.”

6. A TURNING POINT TURNING POINT? GOP Rep. Andy Biggs’ Arizona gubernatorial campaign has been the top priority this year for Turning Point USA, attracting more of its spending than any other candidate — not least because Biggs was Charlie Kirk’s last endorsement before he was killed. But polling indicates Biggs will likely lose to Gov. Katie Hobbs, and other Arizona Republicans are slamming the group for its strategy, POLITICO’s Andrew Howard and Samuel Benson report.

7. WAR REPORT: Despite the U.S. blockade and sanctions against Iran, the Islamic Revolutionary Guard Corps and Iranian military have managed to construct a network to keep obtaining hardware, weapons components and more, Reuters’ Gavin Finch and colleagues report in a new investigation. Tehran has gotten shipments worth some $2 billion since the start of last year, allowing the restocking of drones and missiles through the war. It happened through a series of secret military agencies that “form the backbone of Iran’s military procurement and sanctions evasion apparatus” through “a web of frontmen and foreign shell companies.”

8. THE DOGE TALLY: “Nearly 1 in 5 federal workers left under Trump. Black workers took the biggest hit,” by WaPo’s Andrew Ba Tran and Hannah Natanson: It’s “a faster and deeper overhaul than under any recent predecessor, a Washington Post analysis found. … The cuts were partially offset by new hiring and the reinstatement of some workers. Overall, the portion of the federal workforce that is Black has dropped substantially since Trump’s second administration began … About 85 percent of the departures were resignations or retirements, The Post found, while approximately 32,000 full-time workers were directly fired.”

One worker’s story: “Trump fired him. The ‘DEI Watchlist’ shamed him. Then came 500 job rejections,” by WaPo’s Hannah Natanson and Andrew Ba Tran

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OUT AND ABOUT — Unleash Prosperity had its 10th-anniversary celebration dinner last night at the Conrad Hotel, where Janine Yass and Nick Shirley were honored and President Donald Trump sent in a video message. SPOTTED: Steve Forbes, Arthur Laffer, Jeff Yass, Stephen Moore, Glenn Youngkin, David Asman, Alexandra Preate, Bryn Jeffers and Cale Clingenpeel.

MEDIA MOVES — Paula Reid is now chief White House reporter at MS NOW. She previously worked at CNN and is a CBS alum. … WaPo is adding James Politi as economics editor and naming David Lynch chief economic correspondent. Politi has most recently worked at the FT.

TRANSITION — Jordan Reilly is now a senior account executive at Rokk Solutions. She previously worked at the Brand Guild.

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