Americans are feeling a bit better about the economy but the political benefits for President Joe Biden may be limited by one striking fact.
Improved consumer sentiment in the past month is mostly a reflection of Republican optimism.
The Biden administration has been frustrated by the president’s low approval ratings, especially on economic matters, despite historically low unemployment and significant progress on bringing down the pace of rising prices. Until recently, consumer sentiment—as measured by the University of Michigan’s monthly surveys—remained in the doldrums even while consumer spending has been robust and the economy has grown at a rapid pace.
On the surface, the recent bounce in consumer sentiment would seem to be good news for the administration. The University of Michigan’s index of consumer sentiment is up 19 percent from the rock-bottom readings of last year. The index of current conditions is up 15.3 percent and the index of expectations is up 21.6 percent.
Sentiment has improved among Americans of all political stripes over the past year, according to information released by the University of Michigan on Friday. At the start of 2023, the index for Democrats was at 77.8, the index for independents at 64.8, and the index for Republicans at 48.2. In January of this year, the Democrat index had climbed to 101.7, the independent index to 74.6, and the Republican index to 56.3.
The most recent readings, however, complicate the picture. The Democrat sentiment score actually declined to 98.4 in the mid-February preliminary reading. The independent score was up just slightly at 76.6. The index reflecting the Republican view of the economy, however, jumped to 65.0.
To put that into context, that’s the highest reading on the index for Republicans since May of 2021.
Democratic views of current economic conditions declined sharply between January and February, with the index falling from 106.7 to 96.0. Republican views of current conditions went in the other direction, climbing from 58.1 to 68.2.
While it is possible that Republicans just saw a fundamentally stronger economy in February than January while Democrats saw the opposite, the best explanation is likely political partisanship. Republicans are feeling better about the economy because they are more optimistic about their chances in November while Democrats are feeling worse because they are less optimistic.
Both Democrats and Republicans feel better about the economy than they did a year ago, which could reflect the partisans of both parties feeling good about their electoral prospects. Confidence is not a zero-sum game, even when the political contest ultimately is. Both sides can be convinced they are going to win.
But in the most recent poll, it seems the Republicans are gaining confidence and Democrats are losing a step.