U.S. consumer sentiment fell to a new record low in September, dropping below the previous low set in August. Sentiment among Republicans also “tumbled” sharply, creating a potentially difficult backdrop for President Donald Trump ahead of the midterm elections.

The decline was reported Friday in the Consumer Sentiment Index from the University of Michigan’s Surveys of Consumers. The index fell to 47.8 in September from 51.7 in August, below the 51 reading economists had expected in a Reuters survey. August’s figure had already been the lowest in the survey’s history.

“With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come,” the survey said.

Consumers’ inflation expectations also worsened. Respondents said they expected inflation to reach 4.6 percent over the next year, up from an expectation of 4 percent in August. Their inflation expectations for the next five to 10 years also increased.

For the first time since 2023, a majority of consumers said they expected interest rates to rise over the coming year as the Federal Reserve moves to slow inflation.

The report said the weaker-than-expected results reflected “sizeable declines” among both Democrats and Republicans. Bloomberg contributor Joe Weisenthal wrote on X, “Economic sentiment even among Republicans has been tumbling sharply all year.” His post included a University of Michigan chart showing that Republican economic optimism rose substantially in 2024 and peaked around the time Trump took office. After subsequent fluctuations, Republican consumer sentiment began a steady decline after Trump launched war with Iran and has fallen sharply since July.

The survey said that Republicans, who generally supported the current administration’s economic policies, had also shown a significant decline in their assessment of the economy. In March, 62 percent of Republicans said the government was doing a good job with the economy. That share fell to 35 percent this month, the lowest reading of the current administration and below nearly all readings recorded during Trump’s first administration.

The sentiment report came amid several unfavorable economic indicators. A separate report found that inflation remained persistently above projections, reaching 3.4 percent in August compared with the 2 percent target. Inflation also outpaced wage gains.

“Americans are getting financially squeezed,” Navy Federal Chief Economist Heather Long said. “Many American households have to belt tighten and make difficult choices on what to cut back on. This is why consumption appears to be slowing.” Long also discussed the data in posts on X: https://x.com/byHeatherLong/status/2098390414822674537?s=20 and https://x.com/byHeatherLong/status/2098391567278997555?s=20. Weisenthal’s post is available at https://x.com/TheStalwart/status/2098415221773684903?s=20.

Source: https://www.alternet.org/msn-uk/consumer-sentiment-trump-inflation/