U.S. consumers toe party line when it comes to boom

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 Dem- ocrats foreseeing an imminent recession.

“We’ve never recorded this before,” said Richard Curtin, who d irects t he 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 unem- ployment rate, while Dem- ocrats 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-andday views underscore yet a nother front on which Americans remain polar- ized five months after the election, and with Trump nearing his 100th day in office.

There are some tangi- ble reasons for the split. Many Republican states, including the Midwestern swing states that provided Trump’s margin of victory, have experienced a more sluggish recovery over the past eight years — and are thus more invested in the change promised by Trump.

Many Democratic states have bounced back more vigorously. Hence their politi- cal and economic viewpoints were jolted by November’s election result.

For example, Vermont, Colorado and Massachu- setts — 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.

Rank-and-file Republicans aren’t the only ones who are feeling more upbeat, whether or not it’s justified by the data. Sentiment among business leaders who backed Trump has also surged since the election.

David Congd on, c hief executive of Old Dominion Freight Line, the trucking giant, never expected Trump to win when he voted for him in November.

“I fell out of bed when I got up in the morning on Nov. 9,” he admitted. “I didn’t quite know what I was voting for.”

Despite misfires in Washington like the failed attempt to roll back President Barack Obama’s health care policies, Congdon is definitely feeling more positive.

“Trump’s got a hard road ahead of him, but I think he’s off to a decent start,” said Congdon, who recently joined other transportation executives for a meeting with Trump and Vice Pres- ident Mike Pence.

“I’m personally optimistic about the economy for the rest of the year, and I think we will see an uptick in terms of freight deliveries,” he said. “We have picked up our hiring.”

Economists, too, find their outlook shifting with t he 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 long-term prospects. Although she is pleased that the Affordable Care Act survived Repub- lican efforts to repeal it, the gridlock has led her to believe that Trump will never get a big infrastructure spending package through Congress.

“I am losing hope that we will make those muchneeded investments over the next few years,” said Boushey, executive director of the liberal Center for Equitable Growth.

Among Republicans, the Michigan consumer expectations index was at 61.1 in October, the kind of read- ing 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.

As at the voting booth, the split in perceptio ns co u ld have real-world consequences. Democrats account for 32 percent of respondents in the survey and prophecies could quickly become self-fulfilling by affecting spending and investing decisions.

“If one-third of the population cut their consumer spending by 5 percent, you get a recession,” said Alan Blinder, a Princeton economist who served in the Clinton administration and advised Al Gore and Hillary Clinton on economic policy during their Democratic presidential campaigns. A burst of spending by bullish Republicans, who equal 27 percent of those polled by the Michigan researchers, could counteract much of that drag. And independents, the largest cohort in the survey at 41 percent, are optimistic about growth.

Greater Partisan Divide