Consumer sentiment drops to second‑lowest record, raising midterm risk for GOP
The University of Michigan released a preliminary Consumer Sentiment Index for October 2026 that fell to 46.3, the second‑lowest reading on record and down from 48.1 in September.
The decline arrives as the nation prepares for the November midterm elections, and analysts warn that such low sentiment could become a significant political liability for the Republican Party, which already faces slipping approval for President Donald Trump.
The index’s current‑conditions gauge sank to 44.7, the lowest level ever recorded, while the expectations sub‑index rose modestly to 47.3 from 46.3, marking the first increase since July. Historically, only the May reading has been lower than October’s 46.3.
“Overall, sentiment for lower‑income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices,” survey director Joanne Hsu said. “Frustration over cost‑of‑living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.”
Inflation remains above the Federal Reserve’s 2 % target, running at 3.4 % for the year ending in August. Year‑ahead inflation expectations rose to 4.7 %, and long‑run expectations increased to 3.5 %, both higher than September’s figures.
Despite the bleak sentiment, the jobs market stays strong. Employers continue adding jobs, unemployment is trending down, and new claims for unemployment benefits remain at historically low levels. At the same time, spending has stayed relatively robust, helped in part by a surge in artificial‑intelligence‑related investment.
Political observers note that the sentiment drop has already dented President Trump’s approval ratings, intensifying pressure on GOP candidates to address cost‑of‑living concerns before voters head to the polls. The coming weeks will likely see heightened campaign focus on inflation, gas prices, and financial security as the parties vie for swing voters.
