Voters Head Into the Midterms in a Sour Economic Mood, Blaming Tariffs and the Iran War for Prices
The numbers are solid - 4.2 percent unemployment, 3.4 percent growth, jobless claims near a 57-year low. The mood is not. Reuters reports voters feel the pinch at the gas pump, the utility bill and the restaurant table, and many blame the president's policies.
On the eve of elections that will decide whether Republicans keep control of Congress, voters' minds are on the economy, Reuters reported Monday, with high and rising prices a key issue and many voters blaming President Donald Trump's policies - specifically tariffs and the Iran war - for nagging inflation. Trump is not on the ballot on November 3, but voters have his economic record in mind, and the mood Reuters found is skeptical, if not downright grumpy.
The hard numbers tell a more complicated story, and Reuters laid them side by side. The unemployment rate was 4.2 percent in September and has measured no higher than 4.5 percent for five straight years, the longest such stretch on record; weekly unemployment claims sit near a 57-year low; and the economy grew at a 3.4 percent annualized pace last quarter, its strongest performance this year, with business investment rising at a 12.7 percent pace on AI demand. The two big consumer surveys point in opposite directions: the Conference Board's confidence measure perked up in October, while the University of Michigan's sentiment index registered a near-record low. Brian Jacobsen, chief economic strategist at Annex Wealth Management, told Reuters the confidence index tracks the macroeconomy while the sentiment index is 'more personal,' asking people how affordable they find their lives: 'Sentiment is the bigger driver of election outcomes, but confidence is the bigger driver of markets.' Treasury Secretary Scott Bessent told CNBC last week that consumer surveys 'can be a little gloomy, but the consumer behavior is quite strong.'
Underneath the surveys sits the arithmetic voters feel. Consumer prices and average hourly earnings have both risen about 5.5 percent since January 2025, according to Bureau of Labor Statistics data cited by Reuters - meaning workers are, on purchasing power, no worse off but also no better off than when Trump took office. The eight-month war that followed US and Israeli attacks on Iran lifted fuel prices globally and slowed wage growth, Reuters reports, while 30-year mortgage rates topping 7 percent and a housing shortage have put home purchases out of reach for many. Apollo Global Management's Torsten Slok warned in a mid-October note that a 'sharp reset' in AI expectations could pull back business spending just as higher oil prices, tariffs and tighter immigration restrictions push inflation higher. The Federal Reserve, which raised its policy rate in September, is expected by Reuters' reporting to raise borrowing costs again in December.
