Kamala Harris should be very worried about sagging consumer confidence
Kamala Harris is I am very concerned about consumer sentiment.Unless she can muster a sudden surge of confidence in the economy, she is likely to lose the presidential election in November.
University of Michigan Consumer Sentiment Survey This month it fell to an eight-month low.It has fallen in four of the past five months, and has remained virtually unchanged for the past three months at low levels rarely seen outside of a severe economic downturn.
Many election models, whether formal ones like the one 538 employs or the informal mental models that many commentators have in their heads, Overestimating the impact of objective economic indicatorsThey count things like unemployment, income growth, and broad economic growth as “fundamentals” that can influence elections, even though they only indirectly and in many ways through the medium of emotion.
A big problem with trying to use objective economic data in predictive models is that consumers will vary in the weights they assign to different data. Consumers may care very much about employment and very little about inflation. Like right now,Inflation is considered much more importantand work gets put off.
This is very Frustrating for partisans Incumbent politicians believe that the public should give more credit to candidates and political parties for their performance. For example, almost every day during this election cycle, we hear stories that the public’s pessimistic view of the economy is a “mystery,” a product of partisanship that will probably change soon, or, incredibly, that it has been manufactured by a media biased toward the Democratic Party.
As it turns out, Emotions don’t care about your factsThe advantage of looking at consumer sentiment surveys is that they incorporate fluctuations in the public’s weighting of economic data. Joan Su, the University of Michigan’s director of research, said that even though “labor market expectations remain relatively stable” in the latest survey, “high prices continue to dampen attitudes.” The survey isn’t trying to tell you that consumers are wrong to worry about inflation, it’s simply telling you that: They are disappointed with the economy Because they are very concerned about inflation.
It is actually relatively It’s unusual to see such a sharp and sustained decline in consumer confidence in an election year.Typically, consumer sentiment approaches a cyclical peak during an election year, giving a big boost to the incumbent or candidate of the incumbent party. Notable exceptions include election years when consumer sentiment was at or near its recent lows, such as Carter-Reagan in 1980, Bush-Clinton in 1992, McCain-Obama in 2008, Clinton-Trump in 2016, and Trump-Biden in 2020.
The historical pattern is clear: When consumer sentiment approaches cyclical lows in election years, Incumbent party candidates tend to loseThat’s especially true when the candidate is the incumbent president. The last-minute switch from Ms. Harris to Joe Biden complicates things, but perhaps not by much. Voters Kamala Harris is in charge of policy Depending on the current economic situation.
Everyone feels bad about the economy — especially Democrats
Many have argued that the low consumer sentiment is due to Republican partisan bias against Biden’s economic policies, but the decline in consumer sentiment this year Partisanship is not the explanationThe consumer sentiment index for Democrats was 101.7 in January. It plummeted to 83 in the latest survey, a drop of 18.7%. Among independents, it was down 19.8%, and among Republicans, it was down about 6.6%. The recent decline in support for the Democratic Party is even more pronounced. He is more popular with independents than Republicans.
As a result, views on the economy are much less divided than they were last year, with Democrats’ views much closer to those of Republicans and independents taking a gloomier view of the economy than Republicans did in February. Americans are united in the view that the economic situation is bad.
While July’s sentiment scores were little changed from June, something of major political significance was unfolding beneath the surface. The Democrat Expectations Index fell sharply. This drop was almost entirely offset by a nearly equal increase in the Republican Expectations Index. The clear implication is that Democrats are becoming more pessimistic Because they Confidence in the election wanesRepublicans are feeling more optimistic as expectations of victory grow.
Consumers predict Trump will win
Earlier this week, the University of Michigan released the results of a survey on the presidential election that was conducted over the past three months. Instead of asking consumers who they think will win and who they intend to vote for, the survey asks three different questions: who they think will win, who they think will be good for the economy, and Which do you think is better for your personal finances?.
The first question is “Who do you think will win?”Trump received 48% to Biden’s 44%.When asked who would be best for the economy, 40 percent said Trump and 35 percent said Biden, with 20 percent saying it would make no difference. When it comes to personal finances, 39 percent said Trump and 32 percent said Biden, with 23 percent saying it would make no difference.
President Donald Trump pumps his fist while walking down the runway in Greenville, South Carolina on October 15, 2020. (Official White House Photo by Shealah Craighead via Flickr)
A closer look at the responses to questions about personal finances highlights the depth of disgust and disillusionment Americans feel about the Biden-Harris economy. Across every income quintile: More people expect Trump to have a better impact on their personal finances than Biden.Trump holds an 8-point lead in the lowest quintile, 7-point lead in the second quintile, just 2-point lead in the third quintile, 12-point lead in the fourth quintile, and 4-point lead in the top quintile. Across the economy But he has the strongest support when it comes to issues of personal finance among the working and upper-middle classes.
from “Bottom to top, inside to outside” Americans are looking to Trump to improve their personal financial situations.
