Consumer confidence unexpectedly declines
Consumer confidence unexpectedly worsened in February, and the economic outlook worsened again. Recession warning area.
The cause may be that Democrats are worried about November. Second Trump inauguration.
of Conference Board Consumer Confidence Measure It rose every month from November to January. Wall Street economists had expected it to rise again in February.
There was good reason to expect consumer confidence to continue rising in February. Economic news was mostly positive. housing prices It’s rising.economy has been added work Unemployment rates quickly fell to very low levels, and unemployment claims returned to very low levels. inflation It’s starting to rise month by month, but it hasn’t (so far) risen to the alarming levels seen over the past two years.
Mixed signals from Michigan
of University of Michigan Consumer Sentiment Scale Reports were mixed, but there was some improvement. While the economic outlook has improved slightly, views on the current situation have receded slightly.
But below that, Major changes between parties In consumer psychology. A University of Michigan survey found that Republicans feel better about the economy than they used to, while Democrats feel worse.
The Democratic Party’s consumer confidence index fell from 101.7 in January to 98.4 in February, according to preliminary figures.that’s still a very high score Biden era. In fact, with the exception of January, the situation is better than it has been since the honeymoon period of President Biden’s inauguration in the first half of 2021.
On the other hand, it is low by historical standards. This is comparable to how Republicans assessed the economy in the second half of 2020 in the month before the election, and was much worse than how Republicans felt before the pandemic.And that’s lower than the Democratic score. President Obama’s last two years.
Changing party trends
Perhaps surprisingly, Democratic sentiment declines moved by the opinion of current situation. The current reading fell from 106.7 to 96, while the expected value rose from 98.5 to 99.9.
Republicans, on the other hand, were more positive about both the current situation and expectations. The Republican assessment of the current situation is the highest since August 2021, when the inflationary impact of the Biden administration’s reckless spending and the Federal Reserve’s unwarranted easing policies first became clear. Republican expectations improve This was the highest level since November 2020.
according to Joan HsuBoth Republicans and Democrats are increasingly focused on the upcoming election and its potential impact on the economy, said the University of Michigan researcher.
“Although an increasing proportion of consumers spontaneously say that future economic outcomes depend on the next election, there is little difference in the expectations of consumers who mention elections and those who do not.” said Mr. Sue. “Throughout last year, the percentage of consumers who spontaneously mentioned the upcoming election at some point during an interview increased. Only about 1.3% mentioned the January 2023 election. One year later , 17% did so.”
It may seem strange at first glance, but November election It will affect how you view the current situation. Why do future events change the way people view the current economy? It’s easy to see how expectations change around election prospects, but changes in the current situation are a little more puzzling. is.
But when you look at it, this becomes a little less mysterious. Historical patterns of partisanship Considering the current situation. Immediately after the 2016 presidential election and before President Donald Trump took office, Republicans felt much more comfortable about the status quo. Although nothing has changed in economic reality, Perception has changed.
Donald Trump gives a thumbs up after securing the Republican nomination during the fourth day of the Republican National Convention on July 21, 2016 in Cleveland, Ohio. (Chip Somodevilla/Getty Images)
Four years later, things went in the opposite direction. Republicans’ views of the current situation worsened before Biden took office, while Democrats’ views improved.
In other words, There is a partisan element to the current situation..
The Conference Board does not release a partisan breakdown of its Consumer Confidence Index, but notes that the upcoming election is a factor.
“February write-in responses revealed that while overall inflation remains a key concern for consumers, they are less concerned about food and gas prices, which have eased in recent months. But they are more concerned about the state of the labor market and the U.S. political environment,” said Conference Board economist Dana Peterson.
Given the improvement among Republicans due to the University of Michigan measure, additional concerns about the “political environment” are likely occurring. Statements from the Democratic Party concerned about the election.
