Democrats are gloomy about the economy, and Republicans are optimistic
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People's politics increasingly shape their views about the economy. If there was any doubt, the latest data from the University of Michigan consumer sentiment survey removed it.
Driving the news: Overall consumer sentiment ticked up to the highest level since April, with an index at 74, up from last month's 71.8. But that masks a stunning reversal in the partisan divide about the economy since Election Day.
- Sentiment among Democrats has fallen from 91.4 in October to 70.9 in the December readings.
- Sentiment among Republicans, conversely, has risen from 53.6 in October to 81.6 in December.
Of note: The swing was even more dramatic in terms of future expectations. Democrats' outlook plunged from 93.1 in October to 48.7 in the preliminary December survey.
- The only previous times in the Michigan data that Democrats have been that gloomy about the outlook were in the 2008 financial crisis and the early months of the pandemic.
- Republicans' expectations have soared, meanwhile, from 61.4 to 105.9. The last time Republicans were that optimistic was the last time President-elect Trump was in office, just before the pandemic hit, in early 2020.
What they're saying: "Democrats voiced concerns that anticipated policy changes, particularly tariff hikes, would lead to a resurgence in inflation," said survey director Joanne Hsu in a statement.
- "Republicans disagreed; they expect the next president will usher in an immense slowdown in inflation."
The bottom line: It's hard to know how to interpret survey results about economic conditions when they become, in effect, a proxy for political attitudes.
