NextFin News - Nearly 70 per cent of US voters disapprove of how President Donald Trump has handled inflation and the cost of living, according to the final nationwide pre-midterm survey conducted by research firm Focaldata, a verdict delivered six days before Tuesday's election with prices at the centre of the contest. The disapproval mark — 72 per cent in the survey's toplines, up from 65 per cent in February — leaves fewer than three in ten voters approving of the president's handling of the issue that polls consistently rank as voters' top concern.
The numbers frame the political stakes for Republicans even as the economy posts growth that, on paper, looks resilient: gross domestic product expanded at a 3.4 per cent annual rate in the third quarter, the Federal Reserve held its benchmark rate at 3.75 per cent to 4.00 per cent at the end of October, and the president's overall job approval sits near a third of registered voters. The tension between solid growth and sour public mood is the story — and it is not an American peculiarity. It is the arithmetic of a price level that reset higher and never came back down.
The Poll: Inflation Is the Anchor Issue
The survey, fielded in the final stretch before voters head to the polls, found disapproval of the president's handling of price rises climbing steadily through his second term. In May, a similar nationwide survey put disapproval at roughly 58 per cent; by August it stood at 64 per cent; the final pre-election reading lands near 70 per cent. The deterioration is broad-based. Nearly seven in ten independents disapprove, and about one-third of self-identified Republicans — the president's own party — give him a negative mark on prices.
Issue salience is what turns a soft approval number into an electoral liability. Across the polling landscape, inflation and the cost of living rank as the single most important issue for voters, ahead of immigration and well ahead of other concerns. When asked which party would handle the issue better, respondents favour Democrats by a double-digit margin — 47 per cent to 34 per cent for Republicans. That gap matters because midterm elections are decided at the margin: in competitive House districts, a single-digit shift among voters who name prices as their top issue can flip a seat.
The headline job-approval number reinforces the picture. Only about 33 per cent of registered voters approve of the president's overall performance, a level that has held near record lows for the term. In the generic congressional ballot, Democrats carry a lead in the high single digits among likely voters — a lead built on a sample of 1,845 US adults surveyed in mid-October. None of this is a forecast of seat counts — House elections are 435 separate contests, and Senate maps favour Republicans this cycle — but it is the environment in which those contests are being fought.
The scale of the penalty is historically unusual. A chief data analyst at a major US news network, reviewing decades of inflation-approval polling, found the current net reading — approval minus disapproval — sits roughly 50 percentage points underwater, a depth no president before Trump has reached on the question. That comparison matters because inflation approval has historically been one of the most responsive gauges of economic sentiment; it moves with the price level households actually face, not with the growth aggregates that dominate headlines.
Why Growth Has Not Bought Satisfaction
Here is the puzzle that the poll forces into the open: why does 3.4 per cent GDP growth not translate into voter satisfaction? The answer lies in the difference between an inflation rate and a price level. Policymakers, markets, and headlines track the rate — the pace at which prices are rising. Households live with the level — the actual dollar amount on the grocery receipt, the rent cheque, the fuel pump.
Even when the inflation rate slows, the price level does not reverse. Goods and services that jumped during the post-pandemic surge and the 2026 energy spike stay expensive; they merely stop rising as quickly. Core prices — excluding food and energy — ran at 3.1 per cent year over year in September, well above the central bank's 2 per cent target, and the monthly pace held at 0.3 per cent. Headline consumer prices rose 3.6 per cent from a year earlier in September. That is disinflation, not deflation. The level keeps ratcheting upward, one 0.3 per cent step at a time.
"Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year," said Joanne Hsu, director of the University of Michigan's survey of consumers, whose October reading fell to 46.3 from 48.1 in September.
The most visceral example is energy. US gasoline averages roughly $4.25 a gallon nationwide, more than double the below-$2 level the president promised on the campaign trail, and still elevated above the sub-$70 oil that prevailed before the Middle East escalation earlier this year. Crude has since topped $100 a barrel as the conflict widened. A promise anchored to a price level that no longer exists becomes a standing weekly reminder of unmet expectations. Voters do not vote on the derivative; they vote on the level.
The same arithmetic applies to food and housing. Cumulative inflation since the start of the decade has lifted the price level of a typical consumption basket by roughly a quarter, and rents in most major metros have not retraced their pandemic-era gains. A household that spends $1,200 a month on groceries and fuel today is paying hundreds of dollars more than it did three years ago — and a slowdown in the monthly inflation rate from 0.5 per cent to 0.3 per cent does nothing to reduce that bill. It only means the bill stops growing quite as fast.
The Transmission Channel: Inflation Expectations
The second-order mechanism is expectations. The University of Michigan survey shows year-ahead inflation expectations holding at 4.7 per cent in October — more than double the central bank's target and up from 4.6 per cent in September. When households expect prices to keep rising, they act accordingly: demanding higher wages, pulling spending forward, and locking in dissatisfaction with whoever occupies the White House. Expectations are the bridge between a statistical print and lived experience.
That bridge runs both ways into the labour market. Posted wage growth has run near 2.4 per cent year over year, below the 3.7 per cent pace of consumer prices — meaning real wages are shrinking even as nominal pay rises. Workers who see their paycheque buy less each month do not experience the economy as a 3.4 per cent GDP expansion; they experience it as a slow erosion of purchasing power. The wage-price dynamic that central bankers fear — workers demanding more to catch up, firms passing the cost through — is exactly the loop that keeps expectations unanchored and approval underwater.
This is where the poll feeds back into the market. The Federal Reserve held rates steady on 28 October, with two of the 12 voting members — Governor Lisa Cook and Cleveland Fed President Beth Hammack — dissenting in favour of a quarter-point increase. The statement left the door open but offered no new tightening signal: "Inflation remains elevated," it said. The Fed's own September projections put 2026 PCE inflation at 3.7 per cent, implying policymakers see little near-term relief, while the unemployment rate they pencilled in for the end of the year is 4.1 per cent.
The trap is symmetric. If the Fed tightens further to crush expectations, it risks tipping a labour market that is already cooling — nonfarm payrolls added just 29,000 jobs in September, well below the roughly 90,000 forecast. If it holds and expectations drift higher, it concedes the inflation fight and hands the opposition a permanent campaign theme. With year-ahead expectations at 4.7 per cent, the central bank is already behind the credibility curve; another leg of upward surprises would force its hand regardless of the election outcome. The five-year inflation breakeven embedded in Treasury Inflation-Protected Securities has been trending higher through the autumn, a market-level confirmation that investors, like voters, are pricing a stickier inflation path.
The Counter-Thesis: Partisanship and Mean Reversion
The strongest case against reading this poll as a structural verdict is that economic approval is, at its core, tribal. Only about a third of Republicans disapprove of the president's inflation handling; the aggregate number is being driven by Democrats and independents, and independents' views on the economy have historically been more volatile than partisan ones. On this reading, the disapproval is a reflection of who holds power, not an immutable judgment on the price level — and it would fade the moment inflation prints cool decisively.
There is also the turnout argument. Midterms are decided less by persuadable voters changing their minds than by which side turns out. Immigration remains a potent mobiliser for the Republican base, and a jobless rate near 4.2 per cent — historically low even if inching up from 4.1 per cent in August — can offset affordability complaints in the booth. A voter can be unhappy about prices and still vote on culture, borders, or judicial appointments. History offers some comfort to incumbents' allies: presidential approval in the low 30s has not always translated into the catastrophic midterm losses that a simple swing-voter model would predict, because the opposition party's own standing is often equally soft.
Both points have merit, but they do not fully answer the level-versus-rate problem. Partisanship explains the gap between Republican and Democratic respondents; it does not explain why independents — the swing voters who decide competitive districts — have moved against the president on prices even as growth held up. And mean reversion requires the thing that is not reverting: the price level. For the penalty to fade, households need to see prices stop rising for long enough that the level stops feeling like a wound. That takes quarters, not weeks.
The falsifying signal is concrete. If core PCE inflation prints below 0.2 per cent month over month for three consecutive months into early 2027 and approval of the president's inflation handling recovers above 40 per cent, the cyclical-partisanship thesis wins: the penalty was a rate story all along. If instead core PCE holds at or above 0.3 per cent month over month for two consecutive months while inflation approval stays below 35 per cent, the structural-level thesis stands.
What Comes Next: Scenarios by Time Horizon
Short term (the election week): The poll is a headwind for Republicans in the marginal districts where affordability voters are concentrated — suburbs where grocery and fuel bills dominate the kitchen-table conversation. It does not, on its own, decide the House; it sets the terrain. Watch the actual inflation question in the exit polls: if voters naming inflation as their top issue break toward Democrats by more than 20 points, the affordability penalty has bite beyond the topline approval number. A narrower margin would suggest the issue is baked in and already priced into the political map.
Medium term (first half of 2027): The Fed's path is the swing factor. A central bank that is seen as losing control of expectations hands both parties a reason to attack the status quo — Democrats on affordability, Republicans on the cost of tight money. The most likely policy response from the White House is a push for supply-side relief: energy production, tariff adjustments, and pressure on specific prices. Those measures work slowly and can themselves be inflationary if tariffs rise. The risk is a policy mix that fights the symptom while adding to the cause. For investors, the medium-term trade is a barbell: consumer staples and discount retailers benefit from the downtrade in spending, while energy and domestic-supply names benefit from any policy push to produce more at home.
Long term (structural): The durable lesson for markets is that a permanently higher price level creates a permanently higher political risk premium on growth assets that depend on consumer spending. Consumer discretionary, housing, and rate-sensitive sectors carry the exposure; energy and value-oriented sectors benefit if the policy response leans into domestic supply. The asymmetry is that the political penalty for high prices is larger and more durable than the reward for low unemployment — a one-way bet that shapes the next administration's incentives regardless of which party holds the majority. A government that cannot deliver lower prices will be punished for it; a government that delivers low unemployment while prices stay high will not be rewarded in equal measure.
Scenarios, with triggers:
- Base case: inflation grinds sideways around 3 per cent, expectations stay anchored near 4.5 per cent, and affordability remains a top-three issue through 2027. Republicans absorb a modest penalty in swing districts; the Fed stays on hold, and the fed funds range remains at 3.75 per cent to 4.00 per cent into the first half of next year.
- Upside for the administration: energy prices fall back toward pre-escalation levels, core PCE dips below 0.2 per cent monthly, real wage growth turns positive, and approval on inflation recovers into the low 40s by mid-2027. The penalty proves cyclical after all, and the level-versus-rate gap closes.
- Downside: a renewed commodity spike pushes headline inflation back above 4 per cent, expectations break above 5 per cent, and the Fed is forced to hike again. Disapproval on prices moves toward the mid-70s, the affordability issue dominates the next national cycle, and rate-sensitive sectors reprice on a higher-for-longer path.
The central judgment: this is not a cyclical dip in approval waiting for a better inflation print. It is the political price of a price level that reset and stayed reset. Until households see the level stop climbing — not just the rate slow — the disapproval will hold, and with it the pressure on both the Fed and whoever sits in the White House. Growth buys incumbents credit; permanent price shocks do not.
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