Economic discontent confronts Trump as Americans prepare for midterm vote

Americans are heading into this week's midterm elections with deep dissatisfaction over the economy and President Donald Trump's handling of it, despite growth figures that show continued expansion. The University of Michigan's Index of Consumer Sentiment has fallen to an all-time low, revealing a sharp divide between national economic performance and how households view their circumstances.

Kathryn Anne Edwards, a labour economist and policy consultant in Houston, said 74 per cent of Americans believe their government is doing a poor job managing the economy. Only three times since the 1970s has that share exceeded half, she said. Sentiment is now below levels recorded during severe recessions in the 1980s and the financial crisis of 2008 and 2009. The survey dates to the 1940s and has been conducted monthly since 1978.

Yet the broader economic figures offer a markedly different picture. U.S. GDP grew by 3.8 per cent in the July-to-September quarter, making it the fastest-growing economy in the Western world, according to the latest figures from Washington. Canada is on course for roughly one-third of that growth. Retail sales increased, investment in artificial intelligence continued to rise and stock markets reached record highs.

RBC economists Mike Reid, Carrie Freestone and Imri Haggin described growth as above trend, with strong consumer spending, very low layoffs and an unemployment rate that has remained stable over the past year. For many voters, however, those measures carry less weight than prices. Desjardins Group lead economist Francis Généreux wrote that inflation has come to define the economy for many people, overshadowing employment reports, housing affordability and stock market performance.

Tariffs and the U.S.-led war with Iran have been the two main forces pushing prices higher. Gasoline prices jumped when the war began and have fluctuated as ceasefire discussions and potential agreements emerged. Drivers nevertheless face substantially higher pump prices than a year earlier. U.S. inflation has reached 3.7 per cent, and economists expect further increases.

Research from the New York Federal Reserve also linked tariffs to higher consumer goods prices. Researchers Mary Amiti, Sebastian Heise and David E. Weinstein found that goods inflation, which was easing in 2024, changed direction in 2025. Their estimates showed tariffs had added 2.9 percentage points to goods price inflation by February 2026. Without those duties, goods prices would have declined slightly.

Edwards pointed to two pronounced declines in consumer sentiment, one following the introduction of tariffs and another when the Iran war began. Voters will bring those concerns to the polls this week. If polling holds, the elections could substantially reshape control of Congress, although whether incoming lawmakers would move to reduce tariffs affecting Canadians remains uncertain.