Consumers Are Feeling Better But Not About Washington

Consumers are exhibiting an unusual form of schizophrenia these days, observes economist Brian Jones of Salomon Brothers Inc. While their views of the economic outlook and of government economic policy usually move in tandem, this linkage has recently broken down.

The University of Michigan's monthly consumer survey tells the story. Although its economic expectations index has been rising since January, consumer views of government economic policy have been eroding steadily since the end of the gulf war. Indeed, in the early April survey results, a record 53% of respondents felt the government was doing a poor job managing the economy.

For Republicans, the situation bears an uncomfortable parallel to that of 1980, notes Jones. In that Presidential election year, the index of consumer economic expectations rose sharply, but the percentage of consumers describing government economic policy as poor climbed to a then-record 50%. Shortly thereafter, the incumbent President, Jimmy Carter, suffered a humiliating defeat.

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