US Consumer Sentiment Nears Historic Low Ahead of Midterms

Persistent inflation and elevated gasoline prices have pushed US consumer sentiment close to its lowest recorded level, according to data released Friday, October 23, 2026, by the University of Michigan. The findings highlight mounting household financial pressures weeks before the US midterm elections, as consumers anticipate further price increases.

The university's final consumer sentiment index reading for October stood at 48.0, compared with 48.1 in September. According to the University of Michigan's 74-year survey history, October's result was the second-lowest final reading ever recorded, following a historic low of 44.8 in May.

Rising energy costs have added to the pressure on household budgets. Global oil prices surpassed $116 per barrel on Friday, reaching a six-month high, while the American Automobile Association reported an average US gasoline price of $4.29 per gallon, approximately 43% higher than when the Iran war began in late February.

The University of Michigan's survey also found that consumers expect inflation to increase further over the next year. Survey of Consumers Director Joanne Hsu said sentiment improved among both Democrats and Republicans in October, but those gains were offset by declining confidence among independent voters.

Government inflation data showed that consumer prices rose at an annual rate of 3.7% in September, the latest month with available figures. That rate remained more than one percentage point above the Federal Reserve's 2% inflation target.

Rising prices have also influenced financial markets. Concerns that inflation could erode investment returns have contributed to increases in a key long-term US Treasury yield in recent months. Higher bond yields have, in turn, pushed up borrowing costs for products such as mortgages and credit cards, adding pressure to household finances.

Affordability has emerged as a major concern for voters ahead of the early November midterm elections. The latest sentiment figures provide an indication of public concerns about living costs as the election approaches.

Despite these pressures, several economic indicators have remained positive. US gross domestic product expanded during the three months ending in June, defying concerns about an economic downturn linked to the Iran war. Government data released last month also showed that consumer spending increased 0.9% in August, with household consumption accounting for about two-thirds of US economic activity.

However, the labor market showed signs of slowing in September. The US Bureau of Labor Statistics reported that employers added 29,000 jobs during the month, down sharply from 162,000 in August. The September increase also fell well short of economists' expectations, adding to concerns about the economy's uneven performance.