How’s the economy doing? Depends on your party

Republicans convinced boom is at hand while Dems see imminent recession

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

But not anymore. Since Donald Trump’s victory in November, 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; 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 R. 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 victory, have experienced a more sluggish recovery over the past eight years — and are more invested in Trump’s promises.

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 carried 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.

Economists, too, find their outlook shifting with the political landscape. Before the election, Heather Boushey, a top adviser to Hillary 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.” Now she is much more pessimistic, especially about the economy’s longterm prospects.

The University of Michigan researchers have their own way of measuring the gulf between the two viewpoints and how quickly it has flipped.

Among Republicans, the Michigan consumer expectations index was at 61.1 in October, the kind of reading typically reported in the depths of a recession. Confident that Clinton would win, Democrats registered a 95.4 reading, close to the highs reached when her husband was in office in the late 1990s and the economy was soaring.

By March, the positions were reversed, with an even more extreme split. Republicans’ expectations had soared to 122.5, equivalent to levels registered in boom times. As for Democrats, they were even more pessimistic than Republicans had been in October.