Post-Election Views of the American Economy

Michael Nagle | Bloomberg | Getty Images

Michael Nagle | Bloomberg | Getty Images

Over the last five months, a lot has changed in this country. From the transfer of power in the White House, to a record setting stock market, to continued positive job growth numbers. However, Americans’ overall view of the current state of the economy has remained relatively steady from last year to this. In October of last year, and then again earlier this month, we asked the same three questions in our national surveys of 1,000 American adults. We asked respondents how they think the U.S. economy has done over the last couple years, how they think their area of the country is doing compared to other areas, and how they feel they are doing personally compared to most people in the country. While the steady state of opinions on most of these questions was a bit unexpected, the movement that does exist underneath these topline results is interesting to say the least.  

As the chart below shows, Americans’ view on the direction of the U.S. economy over the last few years has barely changed. Indeed, 29% now feel it has gotten better (a -1-point increase from October), 35% feel it has stayed about the same (a 3-point increase), and 31% think it has gotten worse (a 3-point decrease). Similar patterns hold with how respondents feel their area is doing compared to others; those who feel their area is doing better than others remained steady (26%), while those who feel their area is doing about the same increased by 3 points from 40% to 43%, and those that feel their area is doing worse than others dropped from 30% in October to 25% this year.

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While Americans’ views of the status of the U.S. economy and themselves have held steady overall, the U.S. Presidential election in November did have a clear effect on how Americans view the future. In fact, the most substantial change in opinion over the last five months concerns Americans’ feelings about how the U.S. economy will do over the next few years. Currently, 38% feel it will do better (a 12-point increase since October), while 23% think it will stay the same (a 4-point decrease), and 26% think it will get worse (only a 1-point decrease). This positive movement is based almost solely on partisan views.

As a result of Donald Trump’s unexpected win in the 2016 Presidential election, his supporters are much more optimistic about the future of the United States’ economy than they were prior to the election. Indeed, 72% of Trump voters are expecting an improved economy, nearly five times as many compared to just five months ago. Trump voters have much higher expectations in their president than Clinton voters did before the election, when she was viewed as a shoo in. In October, just 41% of Clinton supporters felt the economy would improve (presumably under a Clinton presidency); while a small number compared to current Trump voters, the percent of Clinton voters who continue to hold on to their optimistic view of the economy moving forward dropped to just 15%, while 47% believe it will get worse.

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It is not surprising that Clinton voters have little faith in the new President and have quickly lost the rosy view they held before November 8th. Similarly, it is not shocking that Donald Trump’s supporters in October saw their own status and the economy as lagging since it was that sentiment that propelled Trump to victory. However, it was a bit of a surprise that Trump’s supporters not only have high expectations for his presidency, but they also view their own economic situation in a different light even though little has probably changed in their daily lives given the short time since Trump took office. For most people, their economic situation compared to others does not dramatically change over five months 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 put people’s economic feelings on a scale (from very negative on all three measurements (-3) to very positive (+3), we see distinct changes in opinion before and after the election depending on which candidate voters supported.

As the chart below shows, before the election (dashed lines), Clinton voters mostly viewed the economy positively with 23% viewing themselves, their area, and the U.S. economy as doing better, while Trump voters were the opposite as just 5% agreed with all of those sentiments and 21% viewed all three pessimistically. However, after the election, while Clinton voters are not as negative as Trump voters were in October, just 11% now say that the U.S. economy, their area, and themselves are doing better. On the flipside, however, Trump voters are now three times as likely to view these economic measurements positively as compared to five months ago (16% compared to 5%).

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Clearly, voters’ views on the country’s economic situation in the future and their own current situation compared to the past and others are closely tied to their political goals. So far, we have seen that candidate preference affects opinions about economic future as well as judgment of the current economic situation, and the relationship is strong enough that the effects are evident even when candidate preference is not directly considered.

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As you can see in the chart above, little has changed from before the election to today among those who think the economy will stay about the same over the next two years (green lines). However, among those who thought the economy would get better or worse, there is a different story. Before the election, not surprisingly, those who thought the economy would get better (blue dashed line) already had a more positive view of the economy overall, while those who thought it would get worse (red dashed line) had increasingly negative views. These two lines cross at almost exactly in the middle of the positive to negative scale. However, since the election, those who think the economy will get better or worse are not following the same patterns as they did before the election. Indeed, those who now think the economy will get worse are much less pessimistic than before the election while those who think it will get better are less optimistic. Said in another way, the distribution of the overall opinions is becoming much closer to an even distribution (a flat line) as opposed to the opposing views we saw before the election (the approximate X shape distribution of the dashed lines). We also see that these lines now cross in decidedly negative territory.

Putting these data points together, we see that with a broader view, partisan voters will switch their views on the national economy quickly based on election outcomes. However, the shift in opinion when it comes to personal economic situations is a little more muddled. 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 economics 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 toward the negative, 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.