Perceptions of the US Economy Have Become Deeply Politicized: Does that Explain the Prevalence of Downbeat Views?
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April 10, 2024
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This article from International Corporate Rescue was first published March 29, 2024. The entire publication is available at: https://www.chasecambria.com/site/journal/article.php?id=1659.
2023 exceeded expectations for the U.S. economy, especially in comparison to overwhelmingly dismal predictions. Despite the economy outperforming on many metrics, a large portion of Americans continue to tell pollsters they have an unfavorable view of the current economic conditions. One possible explanation for this viewpoint could be Americans’ heightened political bias. Beginning under the Obama administration and becoming even more extreme under Trump and Biden, Americans have become increasingly influenced by their political parties. As part of this trend, an increasing number of Americans tend to view the economy as doing poorly when a president of their opposing party is in the White House, even if the macro-level data says otherwise.
In this article, Senior Managing Director Liz Hu and Managing Director John Yozzo examine nearly a decade of monthly polling data from the University of Michigan’s Survey of Consumers and YouGov. The article seeks to accurately quantify the impact of the current political divide among respondents, compare it to mean differences in the responses for other demographic subgroups (such as income, education and age) and calculate whether demonstrated political bias adequately explains the overall negative view of the U.S. economy – spoiler alert: it doesn’t.
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April 10, 2024