Consumer confidence hits record low, Republican optimism collapses ahead of midterms

The University of Michigan’s Surveys of Consumers released data indicating that the Consumer Sentiment Index dropped to 47.8 in September, setting a new historic low and missing one outlet-surveyed economist expectations of 51. Consumers now expect inflation to climb to 4.6% over the next year and foresee higher rates, with a majority predicting the Federal Reserve will raise interest rates. Republican sentiment has tumbled sharply, falling from a March high of 62% favorable views of the government to just 35% this month, the lowest since the early Trump era.

Analysts link the Republican decline to the war with Iran and ongoing economic pressures such as rising fuel prices and trade tensions. Inflation remained above target at 3.4% in August, outpacing wage growth and tightening household budgets, according to Navy Federal chief economist Heather Long. The worsening economic mood arrives as the 2026 midterm elections approach, posing a challenge for Donald Trump’s campaign.