A new poll finds Democrats are now slightly ahead of Republicans on the economy, their first edge in almost ten years.
The Reuters–Ipsos poll, released on Aug. 3, shows 37 percent of U.S. voters prefer Democrats’ handling of the economy, edging out the 36 percent who favor Republicans on the issue. Another 27 percent remain unsure.
Three months ahead of the midterm elections, lawmakers said this could spell trouble for the GOP.
“It’s always the economy. You win when it’s good, and you lose when it’s not. It’s just the way this world works,” Sen. Thom Tillis (R-N.C.), who is not seeking reelection this year, told The Epoch Times.
Various surveys in recent months have highlighted Americans’ frustrations, giving President Donald Trump a thumbs-down on his handling of the economy.
The University of Michigan’s widely watched Consumer Sentiment Index rebounded to its highest level since February last month, but it’s still down 11 percent from a year ago.
Elevated inflation and persistently high prices remain top of mind for households, says Joanne Hsu, the university’s director of consumer surveys.
“Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background,” Hsu said in a statement.
Inside the Data
Global energy markets have stabilized amid optimism that the Strait of Hormuz will reopen, but oil and gas prices remain higher than before the conflict began in late February.
A barrel of West Texas Intermediate—the U.S. benchmark for oil prices—is around $77, about 20 percent higher than at the start of the year.
Motorists continue feeling the pain at the pump. The national average for a gallon of gasoline remains above $4, approximately 40 percent higher than earlier this year.
Rising energy prices have reignited headline inflation pressures—the annual rate sits firmly above 3 percent—forcing the Federal Reserve to consider raising interest rates.
But while consumers contend with increasing energy prices and elevated borrowing costs, renewed inflation has also caused real (inflation-adjusted) wage growth to stall in recent months.
On a year-over-year basis, real average hourly wages rose just 0.1 percent. From June 2025 to June 2026, real average weekly earnings have ticked up only 0.3 percent.
But the earnings situation is not entirely bleak, according to Treasury Secretary Scott Bessent.
Bessent recently touted that the White House’s economic policies are “turning the tide,” especially for those on the lower end of the income spectrum.
“The fact is, lower-wage workers are leading, median workers are gaining, and the pundit-driven K-shaped economy narrative does not hold up,” Bessent said in an Aug. 6 post on X.
Bessent cited the latest quarterly Bureau of Labor Statistics data that show the strongest gains at the 25th percentile and triple the pace observed at the 75th percentile.
“This marks a stark improvement from the loss of purchasing power Main Street Americans experienced during the Biden Administration,” he added.
Moreover, despite last year’s weakness, employment conditions have notably improved in the first half of 2026.
The economy has created more than 500,000 jobs from January to June, and the unemployment rate hovers around a historically low level of 4 percent. Layoffs have also been low, with unemployment claims at their lowest level since 1969.
Growth prospects remain intact, too. The second-quarter GDP growth rate was 1.5 percent and is on track for almost 6 percent in the third quarter.
Consumers continue to open their wallets and power the economy, indicating solid household balance sheets. But there are still some signs of caution, says Giuseppe Sette, cofounder and president of market research firm Reflexivity.
“Staples groups reported normalising pricing with little sign of shoppers trading down; restaurants leaned on value to counter softer traffic; homebuilders flagged affordability strain yet still-resilient demand; and travel, leisure and gaming stayed buoyant as premium spending held firm,” Sette told The Epoch Times in an emailed note.
“It is a picture of caution rather than capitulation.”
‘Very Nervous’
The economy was the key issue for voters during the 2024 election.
Heading into the ballot box two years later, the economy will again be the focus for a sizable share of voters, according to a recent Pew Research Center poll. Twenty-nine percent say affordability, the broader economy, and taxes will drive their decisions on Election Day.
Retaining control of Congress in November might require Republicans to shift their economic messaging, Tillis says.
“Voters are actually pretty forgiving if you just look them in the eye, tell them the truth, and tell them how you’re working on it,” he said. “But if you look them in the eye and say, ‘Well, you’re not really as bad off as you think,’ you’ve lost before you even put the period on that sentence.”
Sen. Bernie Sanders (I-Vt.) says Republicans running for office should be “very nervous” about having to defend the president’s record.
“Good luck to you, telling your constituents why you think it’s a great idea that you got a president who went to war in Iran without congressional approval, and which has cost us 18 American servicemen’s lives, and has a huge negative impact on the economy,” Sanders told reporters.
The White House has blamed the previous administration for affordability issues.
Bessent, in an Aug. 4 interview with CNBC’s “Squawk Box,” said high inflation is a product of the “Biden era.”
“I got sick of hearing about this K-shaped economy. I can say here definitively, the K-shaped economy is over, and we’re seeing more of a C economy,” Bessent said.
Over the last several months, economists have been discussing a K-shaped trend in the economy, in which the upper level performs better than the lower. This has been observed in various aspects of the economy, from consumption to travel.
The Bank of America observed similar developments to those noted by the senior administration official in its latest Consumer Checkpoint report.
“There has been a notable convergence in both wages and spending across income cohorts in recent months. In June, lower-income households’ after-tax wage growth rose above that of middle-income households,” the bank’s economists said.
Trump, meanwhile, has been campaigning on the ground and through tele-rallies to bolster support for Republican candidates across the country and keep the party’s majority in both chambers.
Appearing at an Aug. 5 event in Las Vegas, the president touted the tax advantages from last year’s One Big Beautiful Bill Act, including no taxes on tips.
“So if you’re a waiter, a waitress, a bartender, a bellhop … you pay zero taxes on your tipped income,” Trump told the crowd.
Trump has also regularly dismissed the low polling numbers, writing on Truth Social this week that they are manufactured by the media.
“My REAL Polling Numbers, not those made up by the Fake News Media, are the best they have ever been,” he said in an Aug. 3 post on this social media platform.
But Sen. Josh Hawley (R-Mo.) had a simple message after the Reuters-Ipsos poll: “That is probably cause for concern.”
