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I'm Stephen Carol and this is Here's Why, where we take one new story and to explain it in just a few minutes with our experts here at Bloomberg.

Starting the third quarter, you start to feel some Donald Trump.

In the fourth quarter, you will feel the power of Donald Trump's economy.

We have the worst consumer sentiment about current economic conditions.

Basically ever, We've got to do everything we can to address this cost of living affordability nightmare for the American people.

There hasn't been a big drop off at all.

There's been a lower, more slowing growth of labor, but you know, unemployment is still pretty good.

Fifteen year car loans, fifty year mortgages, two thousand dollars dividend tariff checks coming out.

So I think there is this feeling and I'm trying to adapt, whether it's to or not, that this government is just going to flood the market and the consumer with money and liquidity, and that's all that matter is coming into the midterms, it was a conjob affordability, they call it was a conjob by the Democrats.

The US economy is growing, but Americans are feeling gloomy about it.

The stock market surge has boosted the wealth of the richest households, but with the jobs market cooling, lower income families are pulling back spending.

This gap between the haves and have nots isn't new, but the economic strain is now bleeding from the lowest earners to the middle class.

Here's why affordability is the biggest issue in US politics.

Our managing editor for US Economy and Government, Mario Parker, joins me now for more.

Mario, Firstly, we had a gap in data during the government shutdown, But what can we say about what the big picture is facing the US economy right now?

Well, some of the private data show a continued tip it job market in the final weeks of October, for example, they kind of bolster this feeling.

For the better part of the year, we've seen just this odd situation with the job market where companies aren't necessarily doing a lot of layoffs, they aren't doing a lot of hiring either, so kind of more or less stagnant.

So how do we relate that, then to how Americans are feeling about the US economy.

Things aren't going badly, even if they aren't going amazingly.

I think that's a great point there, because the fact that it isn't going terribly, it just doesn't feel quite good, and that in and of itself is enough to put American voters in a rather dour mood.

One of the things that you've seen, it's put President Trump back on his back foot following the elections, and this message of affordability.

Obviously a persistent theme in the global economy, but also the US economy over the last few years, is just the economic disparities and inequality between some of the different tiers of income levels, right, So you're kind of seeing that play out as well in the US.

Obviously a crucial building block of Trump's electorate going back to when he first ran back in twenty fifteen twenty sixteen is just this working class voter.

Those are the voters that are feeling the most pain.

I saw something on the Bloomberg terminal as well in terms of carlong delinquencies for those with the more risky credit profiles as well.

So all of those things kind of point to and bolster this feeling that Americans have that the economy isn't as strong as what they signed up for when they bought into President Trump's a message to return him back to the White House a year ago.

So what do we know about how those voters have changed.

Are they just not voting or are they actually switching to the Democrats.

Are the Democrats managing to put forward the view that they are better stewards of the economy than the Republican than Donald Trump.

One of the things something I've been saying over the last week and a half or so is q Alanis Morris said, it's very ironic this time a year ago, you had a president that was ushered in, a president that was ushered out because frustrations that the Americans message about the economy wasn't hitting home.

President Joe Biden's administration largely said nothing to see here.

These feelings that you have about the economy, they're misplaced.

And now you're saying President Trump employ a very similar message.

And so what you're saying from the voters at the very least last week showed that voters are willing to give Democrats maybe another look here after they feel as though President Trump hasn't delivered on the economic promises that he campaigned on.

One of the key issues that was talked about a lot during the shutdown was the issue of healthcare.

There are subsidies for Obamacare expiring in the coming weeks, so insurance premiums are going to be going up for millions of Americans as well.

How do we tie in the healthcare issue into how affordability is being discussed?

Well, I think it's part and parcel one of the things that Democrats they didn't have this message of affordability this time a year ago.

It took them nearly twelve months to finally land on that, and the shutdown put these Obamacare ACA extensions front and centered.

Democrats didn't get what they wanted in the form of a tangible extension that would be included in any legislation to open back up the government, But what they did do was have this part of this affordability message.

Twenty million Americans are going to see their healthcare prices increase on top of all of the other burdensome day to day expenses that they've already had.

Marios.

We're looking ahead to the midterms next year, how should we expect the political debate around this issue to play out.

I assume the Democrats will double down on their success, but should we expect the Republicans to respond on this front.

Two, Well, you'll see the Democrats double down on this for sure.

The frustration among Democrats after several of their party broke ranks to end the government shut down was the polls largely showed that they were winning this debate.

Even President Trump conceded after the off year elections that the shutdown was having a negative effect on Republicans.

Now, when we were talking about the affordability Republicans just have to figure out they can avoid the missteps that Democrats themselves had a year ago, where you had a party leader who didn't want to acknowledge the room for improvement that the economy had left, and the rank and file stayed mostly in line.

Do Republicans figure out a way to break with Donald Trump on this issue, knowing how vengeful he can be, or does the President figure out a new way to kind of message on the economy.

Does he change course in some way?

Obviously one of the banners on this affordability issue, Democrats have been able to point to his tearff and trade wars, which are largely unpopular as well.

So Republicans have about a year or so to figure this out.

Democrats will have to figure out how to continue to wield this cudgel that they've successfully been able to over the past week or two.

Okay, Mario Parker, our managing editor for US Economy and Government.

Thank you.

For more explanations like this from our team of three thousand journalists and analysts around the world, go to Bloomberg dot com slash explainers.

I'm Stephen Carroll.

This is here's why.

I'll be back next week with more.

Thanks for listening.