Why are consumers so negative on a good economy? It’s the inflation, stupid.

Republicans are frustrated that the public has such a sour view of the economy, especially when growth is accelerating and we may be on the cusp of what some are calling America’s economic “golden age.”

Rising prices are the ongoing problem, and the most recent inflation readings did nothing to turn around voters’ gloom. A hotter-then-expected Consumer Price Index and Producer Price Index , delivered in recent days, could not have come at a worse time for the Republican Party.

The latest report indicated that inflation, instead of moderating, actually accelerated last month, jumping 0.6 percent month-to-month after rising 0.4 percent in August. More than half the increase, not surprisingly, was from higher energy prices , which rose 5.2 percent from the previous month. Core prices, excluding energy and food, gained 0.3 percent , as they did in August.

Given that Democrats have made affordability the centerpiece of their argument for taking back control of Congress, they seized on the news with glee.

The House Democratic Caucus posted on X , “Trump promised to lower costs and end inflation on day one. The exact opposite has happened. This president has been a total failure.”

Consumer pessimism about the economy, brought on by higher-then-expected inflation, has translated into poor approval ratings for the president and the Republican Party, dimming chances that Republicans will hold onto their majority in the House and the Senate in the midterm elections next month.

That isn’t the norm; typically, Republicans score higher than Democrats on questions like “Who do you trust more to handle the economy?” Not today. A recent Washington Post headline captures the moment: “Democrats hold big edge on economy in key poll for first time since 2012.” The Post writes, “A majority of adults, 51 percent, chose Democrats when asked, ‘Which political party do you think will do a better job of keeping the country prosperous?’ A smaller group, 37 percent, selected Republicans.”

The sentiment shift is frustrating because, in many ways, it doesn’t make sense. America’s banks recently reported mainly strong earnings . But the most noteworthy information delivered from our nation’s banks was that the consumer is doing extremely well.

JPMorgan reported that credit and debit card sales volume was up 10 percent over last year. Wells Fargo’s release cited an incredible 12 percent gain in credit card charges , and an 8 percent jump in debit card spending. Not left behind was Citigroup, where card spending soared 13 percent.

Those are extraordinary numbers for a population recording the lowest confidence numbers in 12 years. And no, the spending surge was not boosted solely because of higher gasoline prices, though that had an impact. Nor were rising outlays financed by mounting debt. In fact, JP Morgan actually dropped the rate of charge-off’s on consumer credit card debt, indicating that borrowers were keeping up. The other banks also reported improving consumer credit quality.

How could this be? According to Wells Fargo’s CEO, consumers are spending because strong employment and wage growth have helped Americans absorb higher prices. Jane Fraser, CEO of Citi, said much the same : “The labor market is stable and companies remain active.”

Here’s the disconnect: economic growth, real income gains, low unemployment and other signs of a healthy economy have been buried under a blanket of anxiety about inflation. Certainly, the liberal media and Democrats running for office have amplified the bad news about rising prices and ignored the more positive news.

Making matters worse, Republican candidates appear incredibly inept at delivering the good news. Republicans seem fearful of repeating the error made by President Biden as he prepared to run for a second term: telling Americans they didn’t understand how well off they actually were. Of course, that was as inflation hit a peak of more than 9 percent ; today, the numbers are not nearly so bad, but consumers are dealing with a cumulative price jump of more than 20 percent since COVID hit the nation — most of it occurring on Biden’s watch.

Gerard Baker at The Wall Street Journal voiced his frustration (and touched that third rail of questioning voters’ judgement) in an op-ed titled , “It’s the Economy, Stupid—but How Stupid?” He pointed out that, “As in 1992, Democrats are poised to win big based on mistaken perceptions that times are difficult.” Comparing today to the year that President Clinton was running for president the first time, Baker notes, “But now as then, it may be that a flawed perception of the economy rather than economic reality is driving voting behavior, and that now as then the U.S. is in the early stages of an economic golden age.”

He reminds readers that, “By the time Americans voted that November, the recession Gov. Clinton had rhetorically exploited [in his campaign against Republican George H.W. Bush] was long over . During the second half of 1992, gross domestic product expanded at an annual rate of 4 percent. Unemployment peaked that summer and was falling sharply by the time the new president took office.” It didn’t matter. Clinton sold the public that the economy was in bad shape, and he won.

Today, we are enjoying solid growth, rising real incomes, low unemployment (and continuing claims are very low), stock markets near record high, and an investment boom. Moreover, we may indeed be on the precipice of what Baker calls an economic “golden age” because of the potential gains from artificial intelligence.

Black Rock CEO Larry Fink, also writing in the Journal, voiced similar sentiments , writing that AI “seemed likely to produce tremendous growth. That growth was the answer to America’s economic Achilles’ heel, its federal debt, which has now reached a record $40 trillion. Expanding the economy by more than 3% a year is ultimately how countries meet the promises they have made … AI makes that kind of growth more achievable than it has been in decades.”

How ironic that the public has turned so negative on this potential golden age.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim and Company.