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Donald Trump is discovering that a booming headline economy is not enough to win over consumers who still feel squeezed by food, gas and housing costs — and that gap is now becoming a political and market risk heading into the midterms.
The latest AP-NORC poll shows just 26% of Americans approve of Trump’s handling of the economy and only 17% back his handling of the cost of living, the clearest sign yet that inflation remains the dominant lens through which voters judge policy. That matters because consumer sentiment is not just a political scorecard; it feeds directly into spending behavior, retail revenues and the durability of the expansion.
Trump’s own diagnosis was blunt: the White House has a “public relations” problem. But the numbers suggest something deeper. The Conference Board’s Consumer Confidence Index slipped to 81.9 in September, the weakest since April 2014, underscoring that households are still uneasy even as equity markets sit near record levels. On the day of the latest move, the SPY hovered near 769.64, well above its 200-day moving average of 717.04, a reminder that investors remain constructive on corporate earnings even as Main Street turns sour.
That disconnect is exactly why this matters for investors. When consumers are anxious, the first-order winners are often defensive sectors, discount retailers, utilities and consumer staples. The losers are the names most dependent on discretionary spending and confidence that wage gains will keep outrunning prices. If the administration cannot reverse the perception problem, companies tied to lower-income households may keep getting the benefit of necessity spending while premium brands and cyclical retailers face a tougher tape.
The poll shows the political damage is broadening beyond the usual opposition. About 52% of Republicans disapprove of Trump’s handling of the cost of living, and 65% of Americans now say his policies are more responsible for persistently high prices than outside factors. That is an economic headache as much as a messaging one: once voters internalize policy as the cause of pain, they tend to demand a shift in spending, taxation or regulation.
For markets, the risk is that weak confidence starts to show up in real activity. Food and gas remain the biggest pain points, and the SNAP changes that took effect Oct. 1 add another layer of pressure on state budgets, even if household benefits are not directly cut. More friction around basic necessities reinforces the case for selective positioning in staples, low-cost grocers, logistics and energy infrastructure, while keeping a cautious eye on leisure, apparel and other discretionary names.
Adalytica’s US Presidential Approval Sentiment gauge is flashing Extreme Fear, with sentiment at 4, a steep deterioration from 21 just two days earlier. That doesn’t move markets by itself, but it captures the same message the polls are sending: the politics of affordability are deteriorating fast, and that usually forces fiscal and policy responses.
The investment takeaway is straightforward: this is not just a White House communications issue, it is a consumer-confidence reset. I believe the market underestimates how long affordability anxiety can suppress risk appetite in politically sensitive sectors. Stay overweight the businesses that sell essentials or benefit from defensive spending, and be selective on consumer cyclicals until policymakers prove they can turn approval into purchasing power.
| Entity | Gains | Losses |
|---|---|---|
| Discount retailers | ▲traffic from value-seeking shoppers | ▼premium and mid-tier chains |
| Consumer staples | ▲defensive demand | ▼discretionary brands |
| Energy/utility providers | ▲steady necessity spending | ▼confidence-sensitive sectors |
| Trump White House | ▲if messaging improves | ▼if affordability pain persists |
