Tag Archives: consumer sentiment

Satisfaction with the country and party ID

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We are OK when our guy is in office; things are terrible with the other guy

It is hardly a surprise that Americans see the country through profoundly strong partisan lenses. Republicans think things are going well with a Republican in the White House, and Democrats do the same when a Democrat is in the Oval Office. But there has been a shift over the last 20 years in how deeply negative we’ve become when the other party is in power. That wasn’t so true in the Clinton years and in the first term of George W. Bush, or earlier.

This chart shows data from Pew on satisfaction with how things are going in the country. The partisan differences are obvious and change abruptly with changes in the presidency. A minor note is also that the change happens immediately after the election, without waiting for the inauguration to actually install the new president.

The partisan effect is very clear. The thing I want to point out is how this changed in Bush’s second term and how very low and very flat satisfaction has been among the out-party in the Obama, Trump 1, Biden and Trump 2 years.

In the Clinton years, satisfaction was higher with Democrats than Republicans, but the lines move in parallel though the 8 years Clinton was in office. In the second term Republican satisfaction was higher than it had been for Democrats in the first term. 

In Bush’s first term Democratic satisfaction fell from the Clinton years but remained well above 20% until late in the first term, then stayed in the teens throughout the second term. In part that reflected the spike following 9/11 but satisfaction declined relatively slowly through the first term. GOP satisfaction remained high in the first term. In the second term, Republicans reacted to the Afghanistan and Iraq wars and the onset of the Great Recession with a substantial decline in their satisfaction.

In each administration since Bush, the out-party had held satisfaction in the teens throughout, regardless of what happened during the administration. Nothing Obama did, or regardless of events during his term, Republican satisfaction remained in the low teens. For Trump’s first term, Democrats remained in the low teens, and for Biden Republican satisfaction always held at about 10%. Now in Trump 2 it is the Democrats turn to be extremely dissatisfied.

This suggests that in the Clinton years and first four years of Bush, there was some common response across party lines to national conditions. The out-party was less satisfied than the in-party, but both moved together up or down. That broke down in Bush’s second term and has never returned since.

The in-party does show some meaningful variation, with Democratic satisfaction rising through Obama’s two terms, as the economy recovered from the Great Recession, and Republican satisfaction drops with the Covid pandemic. In Biden’s term, initially high Democratic satisfaction declined as inflation rose in late 2021 through 2022, recovering only modestly. And so far in Trump 2 GOP satisfaction is high but has been trending down. None of this moved the out-party in those administrations.

V.O. Key’s classic The Responsible Electorate argued voters were not perfectly informed rational actors, steeped in policy, but instead were “not fools”. Voters, Key said, rewarded good performance and punished bad performance. The modern trends shown here since 2009 (and perhaps since 2006) show that for the out-party there is no reward, only stolid unhappiness. That leaves independents, perhaps, to respond to performance, and the in-party can express disappointment, but a major chunk of the electorate is no longer offering any rewards.

The picture is not quite so bleak if we turn from the direction of the country to reactions to the economy. Here too there are large in-party vs out-party differences, but a bit more parallel movement even in recent administrations.

The University of Michigan Index of Consumer Sentiment is a monthly measure of economic perceptions of the current and future economy. Their data by party is only available since 2006 so offers no details of the Clinton administration or the first term of Bush, but the data otherwise gives a good look during the recent period when satisfaction with the direction of the country has remained at rock bottom among out-partisans.

As with satisfaction, there are large partisan differences, and these change abruptly with each change in administration, as does satisfaction. It is notable that no “real” economic conditions change this abruptly on Election Day or on Inauguration Day, so this is a good measure of how powerfully partisanship distorts our perception of “reality.” It is also clear that these shifts begin before the new president takes office. 

What is a bit different here, however, is that the partisan lines (and independents too) continue to move in rough parallel across all these administrations, while satisfaction stopped doing that in 2006 or so. The late Bush second term, when these data begin, shows parallel declines. Through Obama’s two terms all partisans showed increasing sentiment. In the pre-Covid Trump 1 term, the lines are each fairly flat and relatively high, then when Covid arrives all show a sharp drop. In Biden’s term Democrats, independents and Republicans all become more negative about the economy as inflation rises to its peak in June 2022, then all three groups become more positive in most of the remainder of Biden’s term. With Trump 2 so far, independents and Democrats are quite negative while Republicans have remained quite positive, which violates the general parallelism earlier.

This economic data shows that Key’s electorate as the god of reward and punishment may not be dead, at least with respect to the economy. All do seem to respond in similar ways though at different levels. Whether this translates into votes is a topic for another day, but similar responsiveness is a precondition for exacting reward or punishment.

It may be that questions about satisfaction with how things are going in the country are simply so saturated by politics now that they elicit a more explicitly partisan response than was the case in the 1990s and before. A similar trend holds for the “right direction or wrong track” question, a favorite of political pollsters who held it to be a great indicator of whether an administration was in good shape or bad shape. With large majorities saying “wrong track” for administrations since Bush, we see the same out-party nearly all saying wrong track and large partisan divides.

As political division has overrun broader considerations of what it means to be “satisfied with the direction of the country”, we are deeply divided indeed. The remaining responsiveness to economic conditions at least suggests the public may yet respond to good or bad times, if less so that they did in Key’s day, or in the late 1900s. For the 2000s, that responsiveness is at least lessened by universal disapprobation by the out-party.

(Thanks to Pew for making the satisfaction data available. See their report on the sour mood of the country here.)

Second Term Worse than the First

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Consumer sentiment is far worse in 2nd term than in 1st

Analysts of President Donald Trump’s second term, and the outlook for the midterm elections on Nov. 3, have reasonably focused on Trump’s job approval. After holding above the first term approval trend, the second term approval fell below the first term in January and has recently fallen more after the start of the Iran war.

This is well known and I have nothing to add.

What is less often considered are opinions of the economy and especially the comparison of first and second term opinion. This deserves more attention.

The University of Michigan’s index of consumer sentiment is a long-running monthly survey of how Americans feel about the economy. As an index, high values reflect optimism and positive feelings, low values show pessimism and negative feelings. An index value of 100 (where the index stood in 1966) reflects quite positive views of the economy including current conditions and future expectations. As an index, values can be above or below 100, i.e. this is not a percentage.

On April 10, the Michigan survey reported consumer sentiment at 47.6, a record low in polling dating back to 1952. Four of the 5 lowest values ever have come in the last 4 years, with two in the Biden administration in June and July 2022 at 50.0 and 51.5 respectively (at the peak of the inflation surge), and in November 2025 with an index at 51.0, in addition to the current all time low. The 5th lowest index ever was 51.7 in May 1980. In short, despite objective measures of GDP, unemployment and inflation having been far worse in some earlier years, Americans are stunningly sour on the economy,

The comparison of consumer sentiment in the first Trump administration and in the second is the point of this post. The chart highlights the first term up to the 2018 midterms and the second term so far. The average sentiment in the first 23 months of term 1 was 97.5. The average so far in term 2 is 55.5, with the most recent reading at 47.6. That is a 42 point drop from average to average and a 49.9 point drop from average to current reading.

To state the obvious: economic sentiment was a tremendous advantage in the first Trump term and is a tremendous burden in the second.

Sentiment plummeted when the Covid pandemic arrived in early 2020, then began to recover into 2021 before the spike in inflation in the second half of 2021 drove sentiment to the then all-time low of 50 in June 2022. Sentiment recovered somewhat through most of the 2nd half of the Biden administration though it dipped in the run-up to the 2024 election. That persistent negative view of the economy was a constant weight on Biden’s support and ultimately on Harris’ vote.

During Trump’s second term the trend has been sharply down from a peak of 74.0 in December 2024 immediately after his reelection, to 64.7 in the first month of the new term with irregular month to month movements and an overall downward trend.

The low consumer sentiment index means the economy is virtually guaranteed to remain the top concern for voters, and therefore the issue all candidates have to discuss (and claim to fix, with more or less persuasiveness). Above all, this economic gloom will be the atmosphere of the election.

Whatever Trump’s approval rating was in the first term, he could count on an electorate optimistic about the economy. In the second term economic pessimism can only be a drag on his approval and the fortunes of the Republican party in November.

Low consumer sentiment doesn’t guarantee big GOP seat losses in November. While it is correlated with seat loss the fit is quite loose. Presidential approval is a better predictor of seat loss. But economic concerns write the script for the 2026 election.

Let’s do take a moment to reiterate what all have said before: compare Trump approval in term 1 and term 2. While there has been steady decline in net approval in the second term, the first year of the first term was lower and reached what is still the lowest point of either term at -19.4. My estimate of the lowest net approval of the second term is -16.8 on April 6. As of April 9 the net approval estimate is -16.5. You can, of course, consult the many other websites on Substack and elsewhere for alternate estimates of the approval trends. These are mine. Some are a little better for Trump and some a little worse. We all tell the same qualitative story and show very similar bumps and wiggles.

I’ve added annotation for some significant events around the times of movement in approval. See Elliott Morris’s look at consequential events for Trump 2 approval at his Strength in NumbersSubstack. I have slightly different notable events based on my judgement rather than statistical fits.

In the first term approval fell around Trump’s effort to replace Obamacare, and continued down until the passage of the Ryan tax cut package in December 2017. After that, net approval rose until it stabilized at about -10 where it remained through the midterms.

In the second term so far, we’ve not seen a sustained recovery in net approval. After the negative reaction to “Liberation Day” tariffs, approval declined until Trump announced he was pausing the tariffs and negotiating. That bought back some approval points in the late spring, only to again start declining by June. Likewise the October government shutdown coincided with a drop in approval, with some recovery after the shutdown ended. The most recent period of decline has not seen a similar recovery period so far.

This is not to say there can be no approval recovery. We know not what events may occur over the next 207 days until the election. But we do know that inflation and the cost of living has been the most important problem in surveys since the inflation spike in 2021-22, and it has remained the number one problem throughout Trump’s second term. The vast difference in consumer sentiment in the second term compared to the first shows vividly that the economy is not the life preserver the president and his party seek.