The US Cost of Living Index
Confidence Slips as Sensitivity to New Shocks Rises
February 19 - March 03, 2026
Cost-of-living sentiment has edged down to –11, continuing the progression from –7 to –8 tover the past two months. The move is incremental, but the direction is now clear. The brief stabilization seen at the start of the year is no longer holding; sentiment is drifting lower again.
Politically, this matters. Stabilization had created a narrow window for rebuilding confidence. That window now appears to be closing. Prices may not be accelerating sharply, but they are not meaningfully improving either. For many voters, “stable” has come to mean “permanently expensive.”
General cost-of-living discussion remains dominant (33% of negative commentary), centered on wages failing to keep pace, delayed retirement, housing affordability, and the inability of younger Americans to establish financial independence. The tone is less panicked than during the inflation spikes of early 2025, but more hardened. Frustration is settling in.
Political attribution remains elevated. Negative references tied to the “Trump economy” account for 19% of the data, with tariffs, taxes, CPI figures, and policy credibility frequently cited. Official data showing moderating inflation is often dismissed when grocery bills, utility costs, and insurance premiums continue to feel high. The gap between economic messaging and lived experience remains politically dangerous.
Toward the end of the period, the attacks in Iran began to appear in cost-of-living conversation. While not yet a dominant theme, the reaction is instructive. After COVID and the Ukraine war, voters are highly alert to global events that could drive up fuel or food prices. Even before prices move, the expectation that they might is enough to reignite anxiety.
This is the key risk heading into the midterms. When confidence is already low and sentiment is trending downward, new geopolitical shocks are not absorbed neutrally. They compound existing frustration. A spike in gas prices, renewed tariff debates, or market volatility tied to foreign conflict can quickly become symbolic of broader economic mismanagement.
The political danger is not just economic pain — it is heightened sensitivity. In a high-trust environment, voters may tolerate temporary turbulence. In a low-trust environment, even modest disruptions reinforce narratives of instability. At –11, the public mood is not volatile, but it is brittle.
Behaviorally, households remain cautious. Even those with marginally more financial room are saving, paying down debt, and preparing for uncertainty rather than spending freely. This defensive posture reduces the visible impact of incremental economic improvements and limits the political payoff of favorable headline data.
The broader takeaway for 2026 is clear. The cost of living is no longer simply stabilized at a difficult level — it is deteriorating again, however gradually. Confidence is eroding, and sensitivity to new shocks is rising. In that context, voters are unlikely to respond to arguments that conditions are “improving” unless they feel tangible, everyday relief.
Midterms are often shaped less by sudden crises than by cumulative frustration. This reading suggests that frustration is not dissipating. Without visible improvement in affordability — and insulation from new geopolitical cost pressures — the issue of cost of living remains a live vulnerability heading towards November.
Visit our Substack for the full archive
About The Cost of Living Index
Most economic data captures outcomes after the fact and often fails to reflect how conditions are actually experienced. Our work instead tracks how Americans talk about the cost of living, job security and financial pressure in real time. This human-read data trains a proprietary language model that highlights early shifts in confidence and behavior at scale, before they appear in polling or government data — if at all — with clear implications for voting preferences and turnout in the 2026 midterms.