Post-Election Views of the American Economy

Michael Nagle | Bloomberg | Getty Images

Michael Nagle | Bloomberg | Getty Images

The last five months have felt a little busier than usual for most people. After the transfer of power in the White House, we have seen a record setting stock market, continued positive - although not booming - job growth numbers, and fluctuating consumer confidence numbers. However, Americans’ overall view of the current state of the economy has remained relatively steady from last year. Over the course of three national surveys of 1,000 American adults (in October of last year, early in March, and in May) we asked the same four questions:

  • how they feel the U.S. economy has done over the last couple years;
  • how they feel their area of the country is doing compared to other areas;
  • how they feel they are doing personally compared to most people in the country;
  • and do they feel the U.S. economy will get better, worse, or stay the same over the next year or two.

In October of 2016, 26% of Americans felt that the economy was going to be getting better over the next two years, 27% felt it was going to get worse, and 23% felt it was going to stay about the same. Seven months later, 38% said the economy was going to bet better, 26% worse, and 23% feel it would stay about the same. With a little movement on the positive side, we see through the chart below that Americans’ recent views on the future of the U.S. economy are determined largely by who they voted to put in the White House last year. Looking through this prism, we see huge movements. Indeed, back in 2016, when it seemed all but inevitable that Hillary Clinton would be sworn in as our next president, people who said they were voting for Clinton weren’t very concerned about the economy – just 17% said they expected the economy to get worse over the next two years. Obviously, Clinton didn’t win on November 8th, and concern among Clinton supporters increased by 30 percentage points by March. In our national survey two months ago, nearly half of Clinton voters (47%) said they expected things to get worse. That number held steady when we surveyed Americans again in May.

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The opposite is true for Trump voters: back in 2016, they were much more pessimistic about the economy. Nearly two in five (37%) said they expected the economy to get worse, while one-quarter (27%) said they expected it to stay the same and just 15% thought it would get better. Come March, with their presidential choice recently inaugurated, Trump voters were ecstatic; nearly three-quarters (72%) said they felt the economy will get better over the next few years, while just 5% thought it will get worse. Interestingly (and maybe unsurprisingly) enough, this excitement has tapered off since then, with the percent of Trump voters who think the economy will get better dropping by 7 points. Though a majority still think the economy will get better, there was a 4-point increase in those who think it will get worse (5% to 9%) and a 3-point increase in those who believe it will stay the same (17% to 20%).

It is not surprising that Donald Trump’s supporters in October saw their own status and the economy as lagging, since many credit that exact sentiment for propelling Trump to victory. While it a bit of shocking just how big this jump was initially, we were also surprised when Trump voters’ positive feelings about the future of the economy cooled off a little in the last few months. Furthermore, the change in how Trump supporters view their own personal economic situation was even more interesting.

For most people, their economic station in life does not dramatically change over brief time periods unless they lose their job or win the lottery; the same is true with the economic status of a region or area. However, when we combine the answers to people’s responses to three of our economic questions (personal economic fortunes, status of U.S. economy, and state of economy in the area) on a scale from very negative (-3) to very positive (+3), we see distinct changes in opinion before and after the election depending on which candidate voters supported.

Overall, Clinton supporters have a more negative view than they did about seven months ago. Before the election, they mostly viewed the economy positively with 23% viewing themselves, their area, and the U.S. economy as doing better. That dropped to 16% in March and started nosediving more dramatically by May, reaching 10%. The opposite is also true but less dramatically; whereas only 6% of Clinton supporters were feeling negative about themselves, their area, and the U.S. economy in 2016, the same group felt slightly more negative in March (8%) and even more so in May (9%).

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It’s an entirely different story for Trump supporters, who are viewing their life in a whole new light. Trump supporters were decidedly negative back in 2016, with 21% viewing themselves, their area, and the U.S. economy in a negative light. That number plummeted by March, with only 10% feeling the same way, and dropped even further by the time we hit May, where only 6% of Trump voters view themselves, their area, and the U.S. economy negatively. On the other hand, while only 5% of Trump supporters back in 2016 viewed all three things in a positive light, in May, that number jumped up 17 points to 22%. While it had increased to 11% in March, the increase from March to May was even larger than from 2016 to March. Given the drop in how Trump supporters view the future economy, these numbers are a little unexpected, but there is no doubt that the last five months have made Trump supporters feel very good about their own standing.

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Interestingly, when we look at Trump voters who feel the economy is going to be better, they have kept a similar pattern when it comes to overall economic outlook. As show in the chart below, the distribution of those Trump voters who feel positively about themselves, their area, and the US economy is at the same level as in 2016 (31%). On the other end, negative views are just slightly lower now than they were before (6% to 2%), and overall there is a very similar pattern.

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Given these results, it does appear that a positive view of the future economy is the key to the increased positive view of Trump supporters’ overall economic outlook. It would also be interesting to know: were Trump supporters who felt the economy was going to be better in the future feeling that way because they believed their candidate of choice was going to win regardless of what polls and pundits said? Furthermore, what would these distribution lines look like between these two viewpoints?

Moving to the other side of the aisle, views of optimistic Clinton voters on their overall economic outlook are slightly more negative. About one-third (32%) feel completely positive about their overall economic outlook, down from 42% in 2016. On the negative end of the spectrum we see just about no one viewing their personal economic situation as completely negative.

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Among Trump voters who think the economy is going to get worse, there is a more mixed view of their overall economic outlook in 2017 than we saw in right before the election. Now there is a much smaller group of respondents (just 9% of Trump voters) who now feel the economy is going to get worse compared to 37% in 2016, but in 2016 we see a distribution that makes sense. In the fall of 2016, the highest percent of pessimisitc Trump supporters fell on the negative end of the spectrum, and a steady drop down on the positive end. In May 2017, the highest concentration is at the negative end, but the lowest is no longer at the positive end of the spectrum. Said in another way, while slightly more pessamistic Trump voters feel negatively across the board (36% compared to 33% in 2016), more of these Trump voters also feel more positively across the board than they did in 2016 (9% vs. 1%).

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We also see an interesting difference when we look at pessimistic Clinton voters. Indeed, Clinton voters who think the economy is going to get worse have, on average, a more positive outlook of the overall economy since last year. The number of Clinton viewers who view everything negatively has dropped significantly since 2016 (28% to 15%). This year’s trend shows higher numbers on the positive end of the scale than their 2016 counterpart, except for a marginally lower number of these voters feeling positively across the board (4% this year vs. 7% in 2016).

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Putting these data points together, we see that partisan voters will switch their views on the future of the national economy quickly based on election outcomes, as shown in the first bar graph. The view of personal economic situations then follows in line, but it does appear that the change in future outlook is the driver of the positive personal economic standing as opposed to the other way around.  

If we move away from political preferences and break the numbers down by the view Americans hold of the future economy, we see some equally interesting numbers. As expected, those who feel there will be little change in the economy over the next few years have held a remarkably consistent view of the overall economic outlook throughout the past eight months.

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However, among those who feel the economy is going to be getting better in the future, there is a less rosy view of their overall economic outlook (though the numbers have moved up since March). Before the election, those who thought the economy would get better already had a more positive view of the economy overall.

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Among those who think the economy will be getting worse, the overall economic outlook was at its most negative before the election at 30%, before it dropped 12 points to 18% in March; however, it has slowly been on the rise since then. Today, it’s at 22%. The number of people who had positive feelings about other aspects has also returned to 2016 levels (it’s now 4% and was at 3% in 2016) after increasing to 9% in March.

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When we examine respondents’ overall economic outlook from only our October 2016 survey, we found an unsurprising pattern between those with optimistic versus pessimistic views on the future economy. There was a solid upward trend for those who believed the economy was going to get better, with more people feeling positively about themselves, and their area and less feeling the opposite. The same was true for those feeling the economy would be worse, though in the opposite direction; more people here were negative about all three aspects while less were positive. This data showed an appropriate X-shape distribution, as you can see below with the lines crossing just above the neutral point of zero.

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However, in March 2017, the distribution pattern changed unexpectedly: The X-pattern seen in the 2016 data no longer existed. Both sets of people (those who thought the economy was getting better and those who thought it was getting worse) were giving mixed or neutral answers when it came to things like the status of their own personal economic outlook or the area in which they live. The result is an abnormally shaped curve for both sets of Americans. The distribution of the overall opinions became much closer to an even distribution (a flat line) as opposed to the opposing views we saw before the election. Of course, there was a lot going on in March that could have contributed to these mixed feelings.

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In May 2017, the expected X-pattern came back, although the distribution is not as consistent as we saw in 2016. The number of Americans who are moving toward the middle of the scale is increasing while the extremes are still on the expected opposite ends and the percent at the top is lower than what we saw in 2016, causing a flatter X shape. Furthermore, the lines cross right at the neutral point but at almost three times the concentration (17% for both groups were at zero, compared to 12% at slightly above zero in 2016).

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The shift away from this X distribution in March and subsequent shift back in May was especially interesting to us. Were the March numbers an abnormality, or is there something else going on that could explain the changes in these distributions? To try to answer this, we decided to look at two of the surveys at a time. If we look at the March and May surveys from 2017, we see that those who feel very positive about the overall economic outlook reached 29% in May, while those feeling negatively is at just 2%. In March, these numbers were 19% and 7% respectively. As the chart below shows, the distribution at the lower end of the scale did not differ greatly, and stays that way until we move to the higher end scores (2 and above).

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Those people who believed the overall economic outlook would get worse also became more pronounced as we entered May. As the chart below shows, 22% say they feel negatively about everything, which increased from March by 4 points. Looking at these two sets of data points, it does not appear to be a case of completely changed views from March to May, but a combination of more subtle changes.

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One of the more significant conclusions we can draw from this data is that, while their views on overall economic outlook are more independent of partisanship, Americans’ views on the future of U.S. economy are heavily determined by partisan views. What the President and his administration do (or don’t do) in terms of policies seen as affecting the economy will push these numbers in opposite directions based on whether someone supports him or not.

Trump is dealing with some very big expectations from his supporters when it comes to the economy, and the less optimistic view we see on the personal economic outlook could make this a very difficult bar to reach. At the same time, those who voted for Clinton have a very low opinion of what Trump will be able to achieve economically, and while their overall mood has shifted negatively, it is not as strong as might be expected. It will take some time to know for sure about what this all means, but in the meantime, it does appear we are in for more mixed messages in our economic indicators moving forward.