CFE Analysis | Macro

Republican View of Economy: Getting Worse, But Still Better than Obama

Just how bad is the economic outlook? These days the answer seems to depend on the politics of the person being asked.

The Bloomberg Consumer Comfort Index is released weekly, based on a poll that asks only three questions. Consumers are asked to rate the overall economy, the buying climate and their personal finances as being excellent, good, not-so-good or poor.

The latest result released, for the week of April 19, has an overall confidence level of 41.4, which is well below the neutral level of 50, and the lowest reading for the index in more than three years.

But for Republicans the figure is 53.1 – which is lower than it was before the pandemic struck but higher than Republicans rated the economy during any week of Barack Obama’s eight years in office. The highest rating in that era was 49, and that came in December 2016, after Trump had won the election. The highest rating before that was 47.8, in the spring of 2015.

Democrats now rate the economy at 32.9 and self-described independents are only a little more optimistic, at 38.3.

In contrast to the current period, when the pandemic has led to a surge in layoffs that seems likely to produce a recession and the highest unemployment rate since the Great Depression, under Obama the nation emerged from the Great Recession and embarked on a long period of growth, a period that continued under Trump. The final years of Obama’s presidency featured steady growth and falling unemployment.

Or at least that was what the official statistics indicated. Candidate Donald Trump insisted the job numbers were faked and that the real unemployment rate was much higher than the official one, and it may be that some Republicans believed him. President Trump, on the other hand, changed his mind about the integrity of the statistics after he took office, frequently citing them as evidence he was doing a good job.

The Bloomberg index dates to 1985, but it has only been releasing partisan breakdowns since 1990. It appears that for many years, differences in polling responses varied more based on wealth than politics – as might be expected for an index that is based in part on respondents’ expectations for their personal finances.

During the Bill Clinton presidency from 1993 through early 2001, the Republican index was higher than the Democratic one during all but eight weeks. During the two Bush administrations – George Bush and George W. Bush — Republicans were more optimistic in every week.

In the Obama years, Democrats rated the economy higher than Republicans about two-thirds of the time, but the average difference showed a Democratic advantage of only two points.

Since the first few weeks of the Trump administration, Republicans have consistently been more optimistic than Democrats. The average margin during his term has been 22 points, not quite as high as the margin shown in the George W. Bush administration.

Until the pandemic exploded, the index showed a lot of optimism among Democrats as well as Republicans. On Jan. 26, the Democratic index hit 60.5, the highest reading for that party since the boom of 1998-2000, when Bill Clinton was in office.

Democratic optimism began to fade with the spread of the virus and the weakening of the stock market, but Republican optimism seemed to grow with each confident statement from the President. In the week ended March 15, the index for Republicans reached 83.1, the highest ever recorded from either political party. On that day, Trump said the virus was “something that we have tremendous control over.”

Just two days later, Trump did an about face. “This is a pandemic,” he said at a news conference. “I felt it was a pandemic long before it was called a pandemic.” Republican optimism began to fade, although it remains much higher than that of Democrats or Independents.

The next reading of the index, for the week ended this past Sunday, April 26, will be released Thursday.

BBconfidence

Update: Bloomberg’s latest numbers, for week ended 4-26: Overall 39.5, Democrats 31.1, Republicans 50.2, Independents 37.8. The Republican index remains above the highest level it reached during the eight years of the Obama Administration.