It’s time to Break It Down!
Stock Market: Up
Airline Travel: Surging
Movie Going: Trending up
GOP Economic Pessimism: Massive
The unemployment rate is shrinking. The Stock Market is surging. Air travel is on the come up. Theatergoers are returning to seats. And yet, Republicans are firmly entrenched in classic “The sky is falling” mode.
This is their collective outlook; despite the fact the economy is on a path to grow at the fastest pace in 70 years. Consumer outlook among self-identified Republicans is worse today than it was at the apex of the pandemic. Statistics generated by the University of Michigan (UM) indicate Republicans are down on the economy, more than at any time since September 2010, when the country was digging out of the Great Recession.
Conversely, the consumer sentiment of those who self-identify as Democrats is higher than at any point during the presidency of 45. It should be noted that unemployment dipped to lower points than it is today. The divergent sentiments reflect a polarization that is not new. However, it seems to have been turbo-charged during the 45 era, and the elevation continues to this day.
Richard Curtin, who leads the UM’s closely watched consumer sentiment surveys noted that the swings were not so significant, prior to 45. Now, the change is great, and inverted. Last October, prior to the election, the consumer sentiment index among Democrats was 72.4, while Republicans logged in at 98. By Inauguration Day, Democratic sentiment had surged to 89.5, while that of Republicans dropped precipitously, to 69.8. That gap has continued to widen. In the grand scheme of things, the overall national consumer confidence level didn’t fundamentally change; Rather, Democrats and Republicans played musical chairs and changed places.
GOP pessimism notwithstanding, there is ample evidence that the economy is flourishing as the pandemic recedes and health restrictions are lessened. Stocks reached a record high yesterday. The housing market is super-heated. Oxford Economics projects a 7.5% growth rate in 2021, the fastest growth rate since 1951.
Americans are traveling again, both on the roads, and in the skies. Airlines reached a pandemic high on Sunday, based on data provided by the Transportation Security Administration. United Airlines announced its largest aircraft purchase ever yesterday, also the largest of any airline in a decade.
Oh yeah, the 4th of July holiday is coming up this weekend. Nearly 44 million Americans are expected to hit the highways and byways this weekend, based on AAA projections. Demand is so robust that gas stations are experiencing a shortage of tanker truck drivers, which will put a strain on the supply of fuel. The Back-to-Normal index, created by CNN Business and Moody’s Analytics, is now at the highest level of the pandemic.
None of this is to say there has been a full recovery, or that there are no issues. We’re still down over 7.6 million jobs from February 2020 (pre-pandemic). Many businesses are in a bind to find and hire workers. The pandemic has served to escalate the challenges of economic inequality, hitting low-income families hardest.
Simultaneously, the reopening has contributed to supply chain bottlenecks and shortages, which has brought about inflation not seen in decades. Investors and economists zero in on consumer confidence levels, principally because the economy is driven by consumer spending. This partisan divide can lead to a measure of distrust in public policy solutions, which weighs on the degree to which policy can help the economy. The resulting uncertainty can prove corrosive to the impulses of businesses and consumers. Still, in the here and now, “What Republicans Don’t Want You To Know About The U.S. Economy: It’s Booming!”
I’m done; holla back!
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