Jan 17, 2024 - Business

Election-year messaging to drive consumer shifts

Illustration of Benjamin Franklin wearing a vote button.

Illustration: Lindsey Bailey/Axios

Retail experts anticipate economic messaging from this year's presidential campaigns to play a role in consumer behavior.

Why it matters: Consumer spending drives the economy, so ultimately that messaging may become a self-fulfilling prophecy.

Driving the news: Americans' understanding of the economy will be shaped by the views touted by White House hopefuls, Jack Kleinhenz, chief economist at the National Retail Federation, told reporters earlier this week at the trade group's annual conference in New York.

  • And winning matters. Even if some voters feel down about the economy now, they might feel optimistic and spend if their party is likely to win, Jonathan Silver, the CEO of consumer data firm Affinity Solutions, said.

Zoom out: Predicting consumer behavior has already become a trickier task in the aftermath of the pandemic.

  • Poor projections can lead businesses to make bets that have to be reversed quickly and dramatically.
  • Just think about retail's bulging inventories, and Big Tech's exuberant hiring during lockdowns and the ensuing dramatic headcount correction.

Zoom in: Political takes on the economy have already begun to make their mark.

  • Despite record low levels of unemployment, wage growth outpacing inflation and faster than expected overall GDP growth — many Americans see the national economy as weak, Axios' debut Vibes survey by The Harris Poll reveals.
  • And though consumer confidence levels swung up in December, they remained below pre-pandemic highs in 2023.

Of note: Some data suggests that consumers pause spending around the week of the election.

  • "At a minimum, you're going to have a stressor … towards the holiday selling season [of a] potentially distracted consumer … which could impact spending," Brian Nagel, a senior research at Oppenheimer, said.

What to watch: The bigger effects on consumer sentiment and spending will kick in most clearly after the election.

  • A change in leadership can lead to different tax policies, which will have a big impact on individual consumers, Suzy Davidkhanian, vice president of content at Insider Intelligence, noted.

Go deeper:

Go deeper