Economic Pressures Weigh on Voters as Election Nears

Economic pressures are weighing on voters as they lock in decisions for next month’s elections. Inflation is near its highest level in four decades, major stock indexes are down sharply from their all-time peaks and mortgage rates have risen to a point not recorded since 2002. Economists say a recession looks likely next year.

Voters often punish the party in power in Washington when financial conditions are challenging, and the economy is shaping up as Democrats’ biggest liability in the final stretch of campaigning. Lowering inflation and boosting the economy—top issues for voters all year that polls show are more trusted in the hands of Republicans—are pulling further ahead of other concerns in importance.

Congressional Democrats and Mr. Biden still hope their supporters will be energized by increased restrictions on abortion as a result of a Supreme Court decision in June, efforts to lower the cost of prescription drugs and the fallout from the Jan. 6, 2021, attack on the U.S. Capitol by supporters of then-President

Donald Trump.

They also have economic bright spots to highlight. Unemployment is at 3.5%, tied with the lowest level in more than 50 years. The national average cost of gasoline has dropped from summer highs, though it has remained elevated in some battleground states including Arizona and Nevada.

Data released Friday showed worker pay and benefits climbed in the third quarter from a year earlier—maintaining pressure on inflation—and that Americans stepped up their spending and slowed their saving in September. Government figures released Thursday showed that the U.S. economy expanded at a solid pace in the third quarter. The expansion followed two quarters of contraction as consumer and business demand faced headwinds from rising interest rates.

History suggests that Republicans have an advantage in their bid to regain control of Congress. In post-World War II America, the party controlling the White House has lost on average 28 House seats in the first midterm of a new presidency, according to data compiled by the American Presidency Project at the University of California, Santa Barbara.

For midterms from 1936 through 2018, there has been a correlation between the approval rating of the president and his party’s performance in House elections. The American Presidency Project found that presidents with approvals between 40 and 45%, where Mr. Biden has been much of this year, saw their party lose an average of 36 seats.

Mr. Biden’s approval ratings have tended to follow gasoline price movements. His approval score hit the bottom for his presidency in mid-July, shortly after prices at the pump peaked for the year.

The University of Michigan Consumer Sentiment Survey, a gauge of household attitudes on the economy, in June marked its lowest reading on record going back to 1952. It has since ticked up, but since the survey became monthly in 1978, a midterm election has never been held in the midst of such low levels of consumer optimism.

An analysis by the bipartisan Economic Innovation Group found that the majority of states with the most competitive Senate races are feeling greater pressure from inflation.

EIG’s research shows that the battlegrounds of Arizona, Georgia, Nevada and North Carolina had recovered all of the jobs lost to the pandemic by the second half of last year or the first quarter of this year. The states have had particularly strong economies, though that same economic health has made them more prone to inflation.

Inflation is “one of those rare crosscutting issues where everybody is upset, regardless of political affiliation,” said John W. Lettieri, co-founder of EIG.

Even with a household income of about $150,000, Democrat Gretchen Montesanto, a 39-year-old mental-health counselor in Southern Pines, N.C., said she was preparing less-expensive meals and buying fewer items for herself. She doesn’t blame the president for rising prices.

“I don’t think it’s any one thing or one person’s fault,” she said. “I think this is just a wave. This stuff happens from time to time.”

In mid-October, Democrats received bad news on inflation in the final update of the consumer-price index before the election. While the overall number eased slightly in September, to 8.2%, the so-called core consumer-price index, which excludes volatile energy and food prices, rose 6.6% from a year earlier, the biggest increase since 1982.

The Phoenix metropolitan area recorded the biggest annual inflation jump among the nation’s 21 largest metropolitan areas—13%—when the most recently available 12-month data was assessed. The Southwestern metro is a critical area in competitive Arizona races for governor and Congress.

The pain of inflation in suburban Phoenix has been enough to motivate John Shepard to vote in a midterm election. The 40-year-old air-traffic controller said he typically only voted in presidential-election years.

“I’m highly dissatisfied with the economy and the direction this country is going,” Mr. Shepard said. He said he voted for

Barack Obama,

Mitt Romney

and twice for Mr. Trump. This year, he said he plans to vote Republican pretty much across the board.

Mr. Shepard, who is divorced and has one child, said he was traveling less because “airfare is just out of control.”

He said Mr. Biden’s recent decision to forgive up to $20,000 in student-loan debt has also pushed him toward Republicans. “To me, it’s offensive,” he said. “I think the greatest risk is the fiscal irresponsibility of our government.”

Typically, less than half of the voting-age population casts ballots in midterms. The most recent one, in 2018, was an exception when the number surged to 53.4%.

All year, Republicans’ ads have been filled with charges that Democrats have fueled inflation because of spending on pandemic assistance and limits on fossil fuels.

Democrats have countered that more is at work than just government policies, pointing to strong consumer demand, snarled supply chains and Russia’s invasion of Ukraine.

Independent voter Carrie Wildman, a 46-year-old dental hygienist who lives in Pikeville, N.C., said pocketbook issues will be at the top of her list in making voting decisions, and because of that, she is leaning Republican.

“We are much better off than lots of people, but we are absolutely feeling it,” she said.

Ms. Wildman said she was buying generic items at the grocery store as often as possible, something she rarely did before prices started rapidly rising. Higher costs for airplane tickets has meant that she hasn’t been able to afford to see her daughter in Salt Lake City as often as she would like.

“We go to work, and we come home. We can’t afford gas to do anything else,” said Ms. Wildman, an Air Force veteran who estimates she works about 50 hours a week cleaning teeth and teaching others to do so at a community college.

Ms. Wildman, who said she voted twice for Mr. Obama and twice for Mr. Trump, cited Mr. Biden’s student-debt forgiveness plan as another reason she is leaning Republican.

North Carolina is expected to have one of the nation’s closest Senate races. Ms. Wildman said she didn’t blame Mr. Biden for inflation, but did blame too much government spending. “At this point, I don’t trust Democrats, and I don’t trust Republicans,” she said.

Many economists expect unemployment eventually to rise as the Federal Reserve works to slow inflation by raising interest rates, but that isn’t likely to happen until well after the election. The Wall Street Journal’s most recent survey of economists shows that on average they put the probability of a recession in the next 12 months at 63%, up from 49% in July.

Mr. Belveal, the assistant high-school principal in suburban Cleveland, said that a decline in gasoline prices following a 2022 peak in June is about the only positive economic development he sees. He is struggling to decide on his pick in Ohio’s Senate race between Democratic Rep.

Tim Ryan

and Republican author J.D. Vance.

“I have really mixed feelings on both of them,” said Mr. Belveal, who voted for Mr. Biden and Mr. Obama, as well as

George W. Bush

and

John McCain.

“I hear a lot about what the other side is doing wrong.”

Write to John McCormick at mccormick.john@wsj.com