UMich Confidence Rebounds As Political Polarization Plunges To Worst Since Obama's Election

Political polarization among Americans has swung to its most tilted towards Republicans since President Obama's election.

Source: Bloomberg Comfort Index

But this has not stopped the majority of Americans being more upbeat as UMich printed 98.0 for April (better than expected and up from March). Current Conditions are at their highest level since Nov 2000...

Notably, partisanship had no impact on the Current Conditions Index (Democrats and Republicans differed by just 0.4 points), but while respondents suggest the beginning of a convergence on the Expectations Index, with the figure for Democrats rising 7% and falling for Republicans by 7%; the gap still remained an astonishing 50.5 Index points.

A slow pace of convergence will make it more difficult to disentangle political fervor from what appears to be a growing sense among consumers that the economy will experience fundamental changes in the years ahead. It can be anticipated that optimism will commingle with uncertainty, causing uneven spending patterns across months. Moreover, differential price trends for assets, products, and imports will cause uneven trends in incomes, wealth, and spending across products as well as economic subgroups.


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