Fri, Apr 14, 2017 - Page 9 News List

Party affiliation proving crucial to US consumer confidence

Democratic party supporters’ and Republicans’ radically different perceptions of the state of the economy may lead to equally different spending behavior

By Nelson Schwartz  /  NY Times News Service

Economics has a foundation in hard numbers — employment, inflation, spending — that has largely allowed it to sidestep the competing partisan narratives that have afflicted US politics and culture.

Until this year. Since US President Donald Trump’s victory in the elections in November last year, consumer sentiment has diverged in an unprecedented way, with Republicans convinced that a boom is at hand and Democrats foreseeing an imminent recession.

“We’ve never recorded this before,” said Richard Curtin, who directs the University of Michigan’s monthly survey of consumer sentiment.

Although the outlook has occasionally varied by political party since the survey began in 1946, “the partisan divide has never had as large an impact on consumers’ economic expectations,” he said.

At the same time, familiar economic data points have become Rorschach tests. That was evident after the government’s monthly jobs report Friday last week; Republicans’ talking points centered on a 10-year low in the unemployment rate, while Democrats focused on a sharp decline in job creation.

“I find it stunning, to be honest. It’s unreal,” said Michael Strain, director of economic policy studies at the conservative American Enterprise Institute in Washington. “Things that were less politicized in the past, like how you feel about the economy, have become more politicized now.”

Indeed, the night-and-day views underscore yet another front on which Americans remain polarized five months after the election, and with Trump nearing his 100th day in office.

There are some tangible reasons for the split. Many Republican states, including the Midwestern swing states that provided Trump’s margin of victory, have experienced a more sluggish recovery over the past eight years — and are thus more invested in the change promised by Trump.

Many Democratic states have bounced back more vigorously. Hence their political and economic viewpoints were jolted by November’s election result.

For example, Vermont, Colorado and Massachusetts — all won by the Democrats — are thriving, with an unemployment rate below 4 percent. In Republican strongholds like Alaska, Georgia and Alabama, the rate is well above the national average of 4.5 percent.

Rank-and-file Republicans are not the only ones who are feeling more upbeat, whether or not it is justified by the data. Sentiment among business leaders who backed Trump has also surged since the election.

David Congdon, chief executive of Old Dominion Freight Line, the trucking giant, never expected Trump to win when he voted for him in November.

“I fell out of bed when I got up in the morning on Nov. 9,” he admitted. “I didn’t quite know what I was voting for.”

Despite misfires in Washington like the failed attempt to roll back former US president Barack Obama’s healthcare policies, Congdon is definitely feeling more positive.

“Trump’s got a hard road ahead of him, but I think he’s off to a decent start,” said Congdon, who recently joined other transportation executives for a meeting with Trump and US Vice President Mike Pence.

“I’m personally optimistic about the economy for the rest of the year, and I think we will see an uptick in terms of freight deliveries,” he said. “We have picked up our hiring.”

Economists, too, find their outlook shifting with the political landscape. Before the election, Heather Boushey, a top adviser to Democratic presidential candidate Hillary Rodham Clinton during the campaign, thought “the economy was on the right track, with slow and steady growth like we’ve had over the past few years.”

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