For the first time in four years, Republicans are feeling good about the economy. Economically speaking, only one thing has changed.
There’s a distinct difference in reports of consumer confidence along political lines since President-elect Donald Trump was declared the winner of the presidential election.
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The latest consumer sentiment survey from the University of Michigan out Friday, Nov. 22, shows Republicans are feeling pretty peachy about economic expectations moving forward while sentiments from Democrats took a dive. It’s a mirror image of what happened after the 2020 election when President Joe Biden beat out President Donald Trump.
The latest data point confirms other sentiment surveys since Trump was declared the winner on Nov. 6.
In a Morning Consult survey, which shows five-day moving averages, there’s been an immediate shift in political lines since Trump won. As soon as Trump won, Republicans moved from negative into positive territory regarding the economy. However, Democrats slid from more positive to closer to the negative threshold.
Consumer sentiment has historically been a key indicator of the health of the economy. Consumer spending makes up two-thirds of the country’s economic growth, and people spend money when they’re feeling good about economic conditions, so businesses look at consumer sentiment to see how fast the wheels are turning.
In recent years, though, this measure has gotten increasingly political, as this election shows. That may make it a less reliable look at true economic conditions.
Overall, consumer sentiment measured by the University of Michigan is up slightly in November and up 17% over the past year, but sentiment is still far from its pre-pandemic levels. Expectations for the economy are up more than 35% in the past year, likely driven at least in part by lowering inflation.
