At first glance, the disconnect may seem surprising. With the exception of inflation, many economic indicators remain strong, including gross domestic product growth. Yet consumer sentiment continues to languish. That has prompted debate over whether “vibes” are driving public perceptions or whether traditional economic measures are failing to capture something fundamental about Americans’ financial well-being.

The debate carries political significance because voters are giving the economy overwhelming priority in the midterm elections. A Pew Research survey conducted in early October 2026 found that 84% of registered voters considered the economy very important to their vote. The concern was bipartisan. Among the issues included in the survey, the economy was the least polarizing: 82% of Republicans and 88% of Democrats ranked it as very important.

The broader decline in voters’ economic outlook has been driven largely by growing pessimism among Republicans. Democrats remain considerably more negative about the economy than Republicans, but the gap is narrowing.

Those trends help explain why Democrats are expected to make significant gains in Congress. The election will likely be viewed as an assessment of how well the economy is working for ordinary Americans under President Donald Trump and the Republican-controlled Congress, despite strong macroeconomic indicators.

What, then, is happening?

As a scholar of financial markets and global inequality, I believe the relationship between people’s views of their own finances and their assessment of the broader economy is undergoing a more fundamental change. That shift could influence how voters judge the next group of lawmakers in power.

Reality versus ‘vibes’

When scholars examine how people assess the economy—and how they distinguish their personal circumstances from the country’s broader economic condition—one important reference point is the University of Michigan’s consumer sentiment index. The survey asks respondents about their personal finances, their short- and long-term economic outlook, and whether they believe it is a good time to make major purchases.

Historically, the index has tracked key measures of consumer spending and inflation. That tracking matters because consumer spending is the largest single component of U.S. gross domestic product. In general, the state of the broader economy shapes how people view their own financial well-being.

In recent years, however, those measures have diverged. By many indicators, the economy is performing well, but people feel they are falling behind. The divergence has become more pronounced ahead of the midterms. Because the index is updated monthly, each new reading released before Election Day in November will offer a recurring checkpoint on whether the divide between the data and the public’s mood continues to widen.

Despite strong consumer spending, robust business investment and low unemployment, consumer sentiment continues to decline. According to the Michigan index, it is now 10% below its level a year ago.

Some commentators attribute the pessimism to continuing inflation. Inflation has remained above the Federal Reserve’s annual 2% target, with factors including tariffs, energy-price increases stemming from turmoil in the Middle East, and substantial investment in artificial-intelligence development.

But consumer sentiment and inflation data have become disconnected. Inflation has fallen sharply from its 21st-century peak of 9.1% in June 2022, after the pandemic, to 3.7% in September 2026. Even so, consumer sentiment is now lower than it was at that earlier point.

Wages do not fully explain the gap either. Although inflation makes consumer goods more expensive, it can also increase pay. Inflation-adjusted wages rose between 2022 and the first half of 2026, even as consumer sentiment remained weak. In recent months, however, inflation-adjusted wages have begun to fall, which could help explain voters’ increasingly negative outlook.

Inequality versus growth

One possibility is that deeply entrenched inequality accounts for the divergence.

Compared with other periods of moderate-to-high inflation, the U.S. economy is considerably more unequal today. Income inequality has increased over the past 20 years, narrowing only during the crises of 2008 and 2020 before quickly widening to previous levels.

That trend is important for understanding which consumers are driving spending. The Federal Reserve has repeatedly cited strong consumer spending in its economic assessments, but the richest 10% of Americans now account for half of that spending, according to data reported by Marketplace. Meanwhile, spending by the bottom 80% of earners has fallen behind inflation.

In other words, official figures showing strong overall consumer spending are being driven by very wealthy Americans. Those figures may not reflect the experience of typical consumers, who make up most of the electorate.

The growth of inequality has been especially pronounced in wealth. The top 0.1% of American households collectively own five times as much wealth as the bottom 50%, according to Federal Reserve distributional data. Much of that disparity reflects the uneven gains from the stock market boom and the way wealth is taxed.

Americans’ economic malaise, in short, may be driven by concerns about income and wealth that conventional economic measures do not fully capture.

It is not just about personal finances

Economists generally assume that responses to consumer surveys such as the University of Michigan index reflect respondents’ personal experiences.

But other scholars and I argue that some responses may be based less on individuals’ own circumstances than on how they view the economy as a whole. That assessment could include concerns about equity, equality of opportunity and economic justice.

When perceptions are driven by concern for collective well-being rather than solely by personal material self-interest, social scientists describe them as “sociotropic.”

This is not merely a theoretical distinction. Research suggests that voters tend to give their perceptions of the economy more weight than their personal financial circumstances when deciding whether to support the incumbent party.

Trade policy provides one example. Americans’ preferences are influenced less by how a specific measure, such as tariffs, would affect them personally than by how they believe it would affect the country as a whole.

If consumer sentiment follows a similar pattern, it could explain the divergence between generally strong economic trends and weak public sentiment. People may be considering not only their own circumstances but also those of the United States as a whole. Their understanding of “the economy” may include its relationship to inequality.

Understanding the gap between the economic data traditionally used to assess the country’s health and Americans’ perceptions of that economy matters not only to scholars trying to explain it. It could also help shape the agenda of the incoming Congress. If economic insecurity harms the governing party at the polls, the next Congress will be expected to address it after taking office.

Voters generally support the incumbent party when the economy is doing well and the opposition party when it is not. But their assessment of economic health is not straightforward. The past six years suggest that improving headline economic indicators, without addressing Americans’ lived experiences and concerns about the kind of economy being built, may not be enough to ease those concerns.

Erin Kay Lockwood, Assistant Professor of Political Science, University of California, Irvine

This article is republished from The Conversation under a Creative Commons license. The original article was published by Alternet.