Weekly Updates
Weekly Updates
- In early 2021, US consumers’ views about the economy became wildly optimistic. Those who thought the economy was getting better went from below 10% of the population to over 50% in less than six months. It was a phenomenal economic transformation—but only if you were a Democrat. Simultaneously, Republicans who thought that the economy was doing better went from over 60% of the population to below 10%. The pivot point was President Biden replacing President Trump.
- Politics is becoming more polarized in many economies. Social media, the rise of single-issue politics, and collapsing political party membership means this trend is unlikely to reverse. Such polarization increasingly challenges the impartiality of consumer and business sentiment survey results. Political polarization may also affect other survey-based economic data.
- The UK offers a real-time case study. Gallup suggests 85% of the people who intend to vote for the opposition Labour party view the current economy situation as “bad”. If there is a change of government, the reported sentiment of this group may well change as “their” party takes charge—although perhaps less dramatically than in the US.
- Investors need to remember that changing political circumstances could abruptly alter the reported results of consumer and business sentiment polls, without necessarily changing economic behavior.
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