Zayaan Aftab — October 13, 2026
The midterm elections are approaching, and with that, consumer confidence in the economy is historically low. The University of Michigan’s consumer sentiment index is at the second-lowest preliminary reading ever, at 46.3, which is a lower reading than the Vietnam War, the Great Recession, Covid-19, and other key events. Other readings record the lowest consumer confidence in 12.5 years. Though this doesn’t directly mean people feel less confident about the economy than ever, it does go to show that people are concerned about their ability to deal with inflation, higher rates, and gas prices.
The low sentiments are somewhat counterintuitive; the economy is performing “fine,” and the stock market is continuing upward trends. Furthermore, hourly wage gains are growing roughly in line with the consumer price index, which should counter inflationary concerns. However, high-income households are establishing themselves as the backbone of the US economy, contributing to a “K-shaped” trajectory, where high-income households drive disproportionately high numbers of consumer spending and wealth accumulation in comparison to low-income households.
Additionally, inflationary expectations are rising significantly, which is contributing to negative feelings about the current US economy. Year-ahead inflation expectations are up to 4.7%, which may lead to higher spending and upward wage pressures in the short term. The annual inflation rate is expected to be around 3.6%, which is still the highest estimate in the last four months.
Another influential factor to explain the negative consumer sentiment is the decline in job openings. Job openings projections are falling across the board, which may have been partially caused by the rate hike recently issued by the Federal Reserve.
Moreover, increasing discontent with the government’s economic policy is a significant factor for lower consumer sentiments. Specifically, Republicans are experiencing a decline in favorability towards the current administration, with only 35% of Republicans noting that the government is doing a “good job with the economy,” according to a statement by the director of the University of Michigan’s Surveys of Customers. Overall, about 78% of Americans are blaming the Trump administration for rising prices, according to a Reuters/Ipos poll. Gas prices are a major driver of this issue, given that they’ve risen about 40% in the past year.
These sentiments about the economy may have a significant impact on the upcoming elections. Many Americans cite the cost of living as a top issue in their voting choices, and about 54% of respondents total have felt that the cost of living has risen a lot in the last year, according to a poll by The Detroit News. While this is not enough to shift the tides of the elections strictly to one side and/or decide swing states, it is one of the most important factors to consider and will certainly be a factor in campaigns, votes, and expectations.
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