The U.S. economy picked up speed over the summer. Gross domestic product grew at a 3.4% annual rate from July through September, the Commerce Department reported Thursday. That is well ahead of the 2.2% pace recorded in the spring.

The report is the last big look at the economy before voters head to the polls in next week's midterm elections. On paper the numbers look strong. For many households the picture feels very different.

Two forces drove the gain. AI companies kept pouring money into data centers and new technology. Consumer spending also rose, led largely by higher-income Americans who can better absorb rising prices.

Prices keep climbing

Inflation remains a stubborn problem. A separate government report showed prices rose 3.6% in September from a year earlier, far above the Federal Reserve's 2% goal. Wage gains have also fallen behind inflation for many workers.

Americans are saving less as a result. The personal saving rate slipped to 3.8% in September from 4.1% in August.

Energy costs are adding to the strain. The ongoing conflict with Iran has pushed gasoline prices higher, hitting commuters and families who drive long distances for work and errands.

Life on a tight budget

Siri Steven manages a resale shop in Decorah, Iowa. She says she and her husband have put off repairs on their house, which is more than 130 years old. They rarely eat out now and she watches every bill to avoid overdrafts. Saving money, she says, has become almost impossible.

Her experience is common. Spending growth has not been shared evenly, with lower-income families falling further behind than higher earners.

What the Fed does next

The Federal Reserve chose Wednesday to keep interest rates where they are. Thursday's price data could add pressure for an increase at its December meeting.

Some economists warn the expansion is shakier than the headline suggests. Mark Zandi, chief economist at Moody's Analytics, said the economy is still moving forward but called the growth very fragile. Businesses and consumers are working around tariffs and the war with Iran, he said. In his view it does not feel like every part of the economy is firing at once.

With days left before the election, both parties will try to use the report to make their case on who can bring costs down.