Stocks, Prices and a Sour Mood: US Voters Head Into the Midterms Blaming the Economy, Even as the Numbers Stay Strong
Unemployment is 4.2 percent, growth just posted its best quarter of the year - and voters are still grumpy. Reuters explains the split that may decide Congress.
Stocks are trending, prices are the reason, and the two facts meet in one Reuters analysis published Monday: on the eve of elections that will decide whether President Donald Trump's Republicans keep control of Congress, voters' minds are on the economy, with high and rising prices a key issue and many blaming Trump's policies - specifically tariffs and the Iran war - for the nagging inflation. Trump is not on the ballot on November 3, Reuters reported, but voters have his economic record in mind, and the mood is skeptical, if not downright grumpy.
The hard numbers point the other way. 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 - while weekly unemployment claims sit near a 57-year low, Reuters reported. The economy grew at a 3.4 percent annualized pace last quarter, its strongest performance this year, and business investment rose at a 12.7 percent pace. Treasury Secretary Scott Bessent told CNBC last week that consumer surveys can be a little gloomy, but consumer behavior and corporate behavior are actually quite strong, Reuters reported. The surveys themselves are split: 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.
What households feel is the pinch at the register, the pump and the utility bill. Consumer prices and average hourly earnings have both risen about 5.5 percent since January 2025, Reuters reported from Bureau of Labor Statistics data - which means workers are no worse off, but also no better off, than when Trump took office. Thirty-year mortgage rates have topped 7 percent, and the Federal Reserve, which raised its policy rate in September, is expected to raise borrowing costs again in December. And there is a fragility warning underneath the strong quarter: Apollo Global Management chief economist Torsten Slok wrote in a mid-October note that a sharp reset in AI expectations could undermine corporate confidence and weigh on growth just as higher oil prices, tariffs and tighter immigration restrictions push inflation higher, raising the risk of a stagflationary environment. On Tuesday, voters render their own verdict on which set of numbers is real.
