The Washington PostDemocracy Dies in Darkness

Partisanship is making views of the economy worse

Warehouse supervisor Rick Teague unloads a shipping container at a warehouse in Pembroke, Mass., on Nov. 5. (Brian Snyder/Reuters)

An odd trio of news stories broke on Wednesday morning.

Over at the Wall Street Journal was an exploration of how the rising economic tide in the United States is lifting boats globally. “The force of the American expansion is … inducing overseas companies to invest in the U.S.,” the Journal’s Tom Fairless writes, “betting that the growth is still accelerating and will outpace other major economies.”

As it turns out, boats are an apt analogy. The global economy is measured by container vessels and, after a bit of hand-wringing this summer, the possibility of a Christmas marred by backlogged orders has evaporated. That’s the story told by the New York Times’s Niraj Chokshi.

“Many consumers helped themselves by shopping early and in person. Retailers ordered merchandise ahead of time and acted to head off other bottlenecks,” Chokshi reports. “And delivery companies planned well, hired enough people and built enough warehouses to avoid being crushed by a deluge of packages at the last minute, as the Postal Service was last year.”

But then there is that third story, one that seems to be in tension with the other two: confidence in the economy among Americans has fallen to the level seen in April 2020, just as the worst of the pandemic was kicking in.

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According to Gallup, more than 4 in 5 American adults think the economy is at best in fair shape and two-thirds think it’s getting worse.

“Although the latest [Economic Confidence Index] reading is identical to the one from April 2020,” Gallup’s Megan Brenan wrote, “the economic conditions that are likely influencing these assessments are different. At the start of the pandemic, record-high unemployment, uncertainty about the impact of the shutdowns, and the resulting recession likely influenced Americans’ views of the economy at the start of the pandemic. Now that the unemployment rate has improved, inflation and the realization that occasional surges in coronavirus infections may continue to hamper the economic recovery are greater concerns.”

This is an important point. Views of the economy are as low as they were in April 2020 despite many of the key metrics used to measure the economy having improved. The Dow Jones industrial average and S&P 500 have improved by 50 to 70 percent over that time. Sixteen percent more Americans are working than were in April 2020 (though here we’re comparing April 2020 to November 2021, the most recent jobs data available). The unemployment rate has decreased by nearly 11 points over that time. To Brenan’s point, inflation — as measured here in gas prices — is an obvious exception.

But there’s another obvious factor at play here, one that I explored last week: partisanship.

Consider the University of Michigan’s measure of consumer confidence. The election of President Biden prompted views of the economy to flip almost immediately. Part of that is an assessment of how the change in leadership might affect the economy. Part of it, certainly, is unrelated to the economy at all but instead to politics.

This pattern appears across a number of issues — and in Gallup’s data.

In April 2020, Republicans were about evenly split on whether the economy was in excellent or good condition or if it was in fair or poor condition. The divide among Republicans went from fair/poor having a four-point advantage in April 2020 to that view having an 83-point advantage in Gallup’s most recent poll. Among Democrats, the shift was smaller and in the other direction, from 78 to 38 points. The same pattern holds for economic outlook.

That this divide is partisan doesn’t mean it’s insincere, of course. It just suggests that partisan polarization contributes to perceptions of the economy. For example, consider YouGov’s polling over the past year, conducted for the Economist. Over the past 12 months, both Democrats and Republicans have gone from thinking that unemployment rates are the best measure of the health of the economy to thinking that the price of goods is. But among Republicans, that shift has been massive. Three-quarters of Republicans now point to prices as the key indicator of economic health — as that indicator is increasingly the one that makes the economy look more weak.

This overlaps with how economic issues are being discussed on cable news. Over the past year — though, really, after Biden’s inauguration — Fox News has talked about inflation, gas prices and the supply chain far more than its competitors.

Again, it is not the case that Fox News is talking about inflation so Republicans care about inflation and that’s why polling on the economy is so dire. Americans justifiably are more worried about the cost of gasoline and other goods than they are about how the U.S. economy’s strength affects foreign businesses, and it’s a truism that good news (like the resolution of supply chain concerns) gets less oxygen than bad news. Per Gallup, Democratic views of the economy are softer now than Republican views were in April 2020 under Trump.

It is nonetheless also the case that Republican skepticism about the economy, skepticism that is at least stoked by conservative media including Fox News, is contributing to assessments of how the economy is doing. Understanding that neither bolsters Biden’s political position nor makes prices for goods cheaper. But it does help us understand how partisanship can show up even in places one might not expect.