U.S. Consumers Are Watching Government Policy Like Never Before
Three weeks into his presidency, Donald Trump's every statement continues to dominate headlines — and Americans are paying attention.
The University of Michigan consumer sentiment survey, released on Friday morning, found that confidence this month cooled from January's 13-year high, as Americans moderated their expectations on their personal finances and the economy at large. Still, sentiment remains historically strong in the early days of the Trump administration.
What's notable: the biggest change in the consumer survey relates to economic expectations, which survey respondents explicitly tied to news about government policies.
The survey doesn't specifically ask people about their political viewpoints, but does give them an opportunity to describe in their own words how they feel about their personal finances and the economy overall. When asked to recount any recent economic news they had heard, the survey registers a phenomenon never before seen in the UMich study, the director of the consumer survey, Richard Curtin, said in a statement.
Without being prompted, nearly 60 percent of people responded with some mention — favorable or unfavorable — of government economic policies, he says.
"In the long history of the surveys, this total had never reached even half that amount, except for five surveys in 2013 and 2014 that were dominated by negative references to the debt and fiscal cliff crises. Moreover, never before have these spontaneous references to economic policies had such a large impact on the Sentiment Index: a difference of 37 Index points between those that reported news of favorable and unfavorable policies."
Moreover, when the answers were broken out by party affiliation, the survey found that Democrats and Republicans have rarely been this divided on their expectations for the future, a finding that Curtin called "troublesome."
"The Democrat’s Expectations Index is close to its historic low (indicating recession) and the Republican’s Expectations Index near its historic high (indicating expansion)."