In fact, Republicans are more pessimistic than at any point since September 2010, when the economy was just beginning to dig out of the Great Recession.
Meanwhile, consumer sentiment among self-identified Democrats is higher than at any point during the presidency of Donald Trump — even though unemployment was far lower then than it is today.
This polarization of consumer sentiment across party lines is not entirely new, but it got significantly worse during the Trump era and continues to this day.
“It didn’t really matter who was elected, until Trump,” said Richard Curtin, who leads the University of Michigan’s closely-watched consumer sentiment surveys.
Consider what happened last fall, just before the presidential election. The University of Michigan’s consumer sentiment index among Democrats stood at 72.4 in October 2020, compared with 98 for Republicans.
By the time Joe Biden was sworn in as president, sentiment among Democrats surged to 89.5, while that of Republicans plunged to 69.8. That gap widened in the months to come.
“The overall level of consumer confidence nationally didn’t really change when Biden took office,” Curtin said. “Democrats and Republicans just switched places.”
The US economy is booming
Overall consumer sentiment measured by the University of Michigan rose solidly earlier this year before plateauing in recent months.
‘Corrosive’ distrust in government
Of course, none of this is to say all is well with the US economy.
Investors and economists pay attention to consumer confidence because the US economy is driven in large part by consumer spending. If nervous Americans stop spending, the economy will tank. If they keep buying, it soars.
It’s hard to say how much the polarization of consumer confidence impacts the broader economy, though it’s clearly not a positive.
“This partisanship creates a measure of distrust in what public policy can be and how it can help the economy,” Curtis said. “And this uncertainty is corrosive of economic plans by businesses and consumers alike.”