The US Cost of Living Index
Iran Deepens Consumer Anxiety — Raising Midterm Risk
March 18-30, 2026
The latest reading shows cost-of-living sentiment falling sharply to –17, the weakest level since April 2025, when tariff threats and “Liberation Day” drove a surge in economic anxiety. The recent pattern — from –7 to –13 — had pointed to gradual deterioration. This latest move marks a clear break. The period of uneasy stability has ended, and sentiment is now worsening again.
For voters, this shift matters. It does not reflect a sudden surge in prices across the board, but a growing belief that the situation is not improving — and is likely to deteriorate further. The sense of pressure that defined much of the past year remains firmly in place, but is now being reinforced by new concerns.
The escalation in Iran is central to this change. While not the dominant driver in volume, it is having an outsized impact on perception. Gas prices have risen quickly and visibly, and voters are drawing a direct line between the conflict and their cost of living.
But the political significance runs deeper than fuel prices alone. Recent experience — from COVID to the war in Ukraine — has conditioned voters to expect that global events will translate into higher costs at home. As a result, Iran is not being viewed as a contained foreign policy issue. It is being interpreted as the start of another wave of economic pressure.
That expectation is already shaping sentiment. Voters are not waiting for higher prices to fully materialize across groceries, utilities, and other essentials. They are anticipating it. The result is a shift from concern to anxiety — and from anxiety to frustration.
This is particularly problematic for the administration. During the tariff disputes of 2025, economic anxiety rose sharply but proved reversible once policy direction changed. The situation with Iran is different. It is less controllable, more prolonged, and more directly linked — in voters’ minds — to rising everyday costs. That makes the political risk harder to manage and more likely to persist.
At the same time, underlying pressures remain unresolved. Housing, groceries, utilities and debt continue to dominate perceptions of affordability. Wages are still widely seen as failing to keep pace. These structural issues have not eased. Instead, Iran has layered a new, more immediate concern on top of them.
The result is a more volatile political environment. When confidence is low, even relatively small changes — such as a rise in gas prices — can have an outsized effect on how voters judge the economy and those in charge. Economic perceptions become more reactive, more emotionally charged, and more easily shaped by events.
Looking ahead to the 2026 midterms, this combination is significant. Elections are shaped not just by economic data, but by lived experience and expectation. Right now, voters feel under pressure and increasingly expect that pressure to intensify.
The key takeaway is that the cost of living is not just a persistent issue — it is an escalating one. With sentiment now at its weakest point since early 2025 and anxiety rising in response to events like Iran, the economy remains a central political vulnerability. Unless voters begin to see clear and tangible improvement in their day-to-day finances, the risk is that economic anxiety continues to build — and translates directly into electoral consequences.
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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.