Economic confidence among Democrats and Republicans diverges
Following the insurrection at the U.S. Capitol last week, economic confidence among Republicans and Democrats has gone in opposite directions.
What happened: While overall consumer confidence edged lower, according to Morning Consult’s Index of Consumer Sentiment, dropping 0.64 points, confidence among Democrats rose nearly 4 points while it fell by 5.6 points among Republicans.
The intrigue: It's "effectively impossible to isolate the impact on consumer confidence of the election results from that of the attack on the Capitol," Morning Consult economist John Leer says in a note.
- "Were it not for the violence in Washington, Trump may not have publicly stated his intent to depart from the White House, potentially leaving the share of Republicans who believe the election would be overturned unchanged."
- "But following last week’s events, just 13 percent of Republicans believe the election results would be overturned, down from 27 percent in mid-December. In this sense, the attack on the Capitol likely accelerated the decrease in consumer confidence among Republicans."
The big picture: Leer also notes that the riot at the Capitol overwhelmed the positive impact that consumers had factored in from checks arriving as part of the $908 billion coronavirus relief bill, saying the positive momentum has now "abated."
- However, "[a]dditional fiscal stimulus in the form of federal unemployment insurance will provide consumers a boost once states begin distributing those funds later this month."