US economic sentiment deteriorated slightly in October, according to Fathom’s US Economic Sentiment Index (US ESI), which dipped from 6.3% to 6.0%. Uncertainty ahead of the midterm elections and fears about the effects of the ongoing Sino-US trade war are possible explanations. Nearly three-quarters of the constituent series posted lower readings than in the previous month and there was a divergence between business and consumer surveys: 12 out of 14 measures of business confidence decreased, compared with 5 out of the 9 measures of consumer confidence. The breakdown highlights that the slowdown in overall sentiment was driven by businesses. As

Voters go to the polls on Tuesday in the US midterm elections, where a third of seats in the Senate and all seats in the House of Representatives are up for grabs. The Democrats look likely to win control of the House, while the Senate will probably get a little bit ‘redder’. The president’s legislative agenda would be easier to pursue if Republicans could keep control of both chambers, but, with little in the way of new fiscal stimulus in the pipeline, we do not anticipate a significant change in the economic outlook if they fail to keep the House.