US sentiment index nears record low ahead of elections — Cyprus Mail

In the United States, on the eve of the midterm elections to Congress, the University of Michigan consumer sentiment index was near a record low. High prices are one of the key issues for voters, and many of them link inflation to the economic policies of President Donald Trump, including tariffs and the war in Iran, Cyprus Mail reports.

Trump is not running in the November 3 elections, but voters are taking his economic decisions into account before casting their ballots. Polls, however, present a mixed picture: the Conference Board consumer confidence index rose in October, while the University of Michigan sentiment index remained near a record low.

Low unemployment and growth

Macroeconomic data point to the relative resilience of the US economy. The unemployment rate stood at 4.2% in September and has not exceeded 4.5% for five years, the longest such period on record. Weekly unemployment benefit claims are near their lowest level in 57 years.

The US economy grew by 3.4% at an annualized rate last quarter, its strongest result since the start of the year. Business investment increased by 12.7% at an annualized rate, partly due to artificial intelligence-related demand. Stock market growth supported consumer spending, especially among higher-income households.

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Inflation and housing affordability

Despite slowing compared with its 2022 peak, inflation remains above the US Federal Reserve's 2% target. Since January 2025, consumer prices and average hourly earnings have risen by about 5.5%, so workers' purchasing power has generally not improved.

The Federal Reserve raised its benchmark rate in September and is expected to potentially raise borrowing costs again in December. Housing affordability is also a concern for voters: rates on 30-year mortgages exceeded 7%, while a supply shortage pushed home prices higher.

Torsten Slok, chief economist at Apollo Global Management, warned that a sharp correction in expectations for artificial intelligence investment could weaken business confidence, reduce capital spending, and affect GDP growth rates. In his assessment, higher oil prices, tariffs, and tighter immigration restrictions could simultaneously intensify inflationary pressure.