Cost of Living Midterms: Voters Are in a Sour Economic Mood, Reuters Finds, Even With Jobs Strong
High and rising prices are the key issue on the eve of elections that will decide control of Congress, Reuters reported, with many voters blaming President Donald Trump's tariffs and the Iran war for the nagging inflation — even as unemployment stays historically low.
On the eve of elections that will decide whether President Donald Trump's Republican Party keeps control of Congress, voters' minds are on the economy, Reuters reported Monday. High and rising prices are a key issue, and many voters are blaming Trump's policies — specifically his tariffs and the war with Iran — for nagging inflation. Inflation is not nearly as high as a few years ago, Reuters reported, but it is elevated and ever-present enough that people feel the pinch whenever they fill a gas tank, pay a utility bill or order a meal. Trump is not on the ballot on Nov. 3, but voters have his economic record in mind, and the mood is skeptical, if not downright grumpy.
The numbers tell a more complex story. The unemployment rate was 4.2 percent in September and has measured no higher than 4.5 percent for five straight years, the longest stretch on record; weekly unemployment claims are near a 57-year low; the economy grew at a 3.4 percent annualized pace last quarter, its strongest this year; and business investment rose at a 12.7 percent pace. The Conference Board's confidence measure perked up in October, while the University of Michigan's sentiment index registered a near-record low. "Sentiment is the bigger driver of election outcomes, but confidence is the bigger driver of markets," Annex Wealth Management's Brian Jacobsen told Reuters. Treasury Secretary Scott Bessent told CNBC that consumer behavior is "quite strong" despite gloomy surveys.
What changed this year, Reuters reported, is that wage growth stopped outrunning prices: consumer prices and average hourly earnings have both risen about 5.5 percent since January 2025, so workers are no worse off — but also no better off — than when Trump came into office. The Federal Reserve raised its policy rate in September and is expected to raise borrowing costs again in December, and the combination of 30-year mortgage rates above 7 percent and a housing shortage has put home purchases out of reach for many people. Apollo's Torsten Slok warned in a mid-October note, reported by Reuters, that a sharp reset in AI expectations could weigh on growth just as higher oil prices, tariffs and tighter immigration restrictions push inflation higher.
