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View ‘Consumer Sentiment’ Surveys Skeptically
Are Surveys About the Economy Really About Political Views?
The headline writers pounced on the plunge in the University of Michigan’s (UMich) much-watched index for consumer sentiment on April 11th.
Almost gleefully so.
“Consumer sentiment tumbles in April as inflation fears spike” (CNBC.com) and “Extends Plunge as Price Expectations Soar” (Bloomberg). The Wall Street Journal, “‘From Anxious to Petrified’: Consumer Sentiment Plunges Further.”
Petrified?
Maybe we should lighten up.
Stocks are down, but from lofty all-time highs.
Tariff fears are likely overstated: We have seen this movie before.
The UMich index went down 11% in the first half April, sliding 6.2 points to 50.8 from 57.0 in March.
Then again, what do they know?
Consumers simply may be wrong.
They may be overly worried and rattled by what they hear in the media from political partisans and pessimistic pixel pundits.
They may even be blinded by their own political bent: Democrats want the economy to stumble, Republicans want to see it soar.
This raises a key question about the real truth in the much-watched UMich survey: Are people saying how they really feel about the economy — or are they expressing a political view?
“Partisan views now dominate consumers’ economic expectations,” states a UMich survey report issued in January 2022.
“Unfortunately, the size of the partisan divide in expectations has completely dominated rational assessments of ongoing economic trends. This situation is likely to encourage poor decisions by consumers and policy makers alike.”
The split between Democrat and Republican views of the economy was far larger than any difference based on respondents’ age cohort or income level.
This political gap has more than doubled since President Donald Trump took office in 2017.
Under President George W. Bush, Republicans were 21.3 points more optimistic than Democrats, and under President Barack Obama, Democrats were 25 points more optimistic than Republicans.
But this gap suddenly leapt up to 53.1 in Trump’s first term and was at 52.3 points during the presidency of Joe Biden, a sign of the polarized political landscape.
On unemployment views, the Democrat-Republican gap was almost 70 points for Trump and Biden, compared with just 17 points for Bush and 31 points for Obama.
In the latest report for April, the sentiment index (on a scale of 100, set in 1966) was at 81.9 for Republicans and at only 34.1 for Democrats; the “index of consumer expectations” was even more widely divergent, at 86.3 for Republicans and a lowly 24.0 for Democrats.
How can fellow Americans see such starkly different views of the U.S. economy? Maybe they are just lying to the UMich survey takers.
“I would not say they are lying, but I will say they are interpreting the world around them in completely different ways,” said Joanne Hsu, director of the UMich survey.
“And what really fascinates me is that people make these economic decisions based on these very, very different views.”
These partisan differences show up in consumer spending and business startups.
“Can you believe that Republicans are more likely to start a business under a Republican president, and then that goes down once it switches to a Democratic president, and vice versa? They’re making decisions based on those peculiar views,” Hsu said.
In the April survey, consumers said their inflation expectations had leapt to 6.7%, up from 4.9% in March, when Democrats predicted 6.5% inflation and Republicans saw only 0.1% — an enormous gap in outlook. Independents were at 4.4%.
The numbers for March also came out on Friday: The consumer price index fell 0.1% from the month before, for the first time since May 2020, to an annual rate of 2.4%.
Everyone was wrong, especially Democrats.
Given this rift, the makeup of the audience responding to the UMich survey is paramount. The April reading is based on a survey of 500 people, with a margin of error of 6%; the final April report will survey an extra 500 respondents for a total 1,000 for the month.
One private equity firm, Thomas J. Lee’s Fundstrat, argues that 57% of respondents are Democrats, which would skew the results in an anti-Trump way.
“I don’t know where they get that number from,” said UMich’s Hsu. “Our largest group is the independents.”
In the April survey, 34% of the base was Democrat, 24% Republican, and 42% independent, based on a three-month moving average, she said. Since 2017, the response has been 21%-30% Republican and 25%-36% Democrat, with independents in between.
Hsu issued a new report this month, “Partisan Perceptions and Sentiment Measurement,” pointing out that independent voters are a good proxy for the nationwide picture and that the sentiments of Republicans, Democrats, and independents all move up and down together.
She wrote, “The findings confirm the continued validity of our survey measurements in multiple ways.”
At the end of the day, you still have to wonder.
Dennis Kneale, a former anchor at CNBC and Fox Business, is host of the “What’s Bugging Me” podcast on Ricochet and author of “The Leadership Genius of Elon Musk.” This piece originally appeared on NewsMax.com. ©2025 Dennis Kneale
Published in General
I’ve seen enough surveys to know that some people are answering questions based on whether an answer will make their party look good or bad. There is no way everyone believes what they claim to believe in some of these polls. Many of them aren’t lying, they’ve just trained themselves to believe whatever their party leaders tell them to believe.
The best way to analyze these “consumer sentiment” surveys is to compare the results 100 days into the First Trump administration with the results 100 days into the Second Trump administration.
Both surveys would be impacted by partisanship. Maybe there is a difference. Maybe there isn’t.
Both surveys would also be impacted by the millions of people who died in the meantime, and the millions of people who reached voting age in the meantime.
Well, here’s your answer, followed by the relevant graph from the University of Michigan. It doesn’t bode well for Trump.
https://capitaloneshopping.com/research/university-of-michigan-consumer-sentiment-index/
It looks like during the first 100 days of Trump 1, the consumer sentiment index is was over 95. Today, it looks like it is a touch higher than it was during the 2008 financial crisis at 68.2.
Hi guys, as the author of the article, it makes me happy to see these comments. I think @RandyWeivoda is 100% on-target. In the most recent April survey, Republicans said they expect inflation to rise at only 0.1% a year.
But clearly no one really thinks inflation will be that low, right? They were gaming the system. Same for the Democrats: they were projecting something like 6.7% inflation, which was a ridiculous forecast.
Thomas J. Lee of Fundstrat recently put out a chart raising this same question in many other areas: 92% of Fed staff political donations go to Democrats; 67% of hedge fund traders are Democrats.
Is ANYTHING free of political effects in this age of the Great Divide?
Enjoy your Friday night! Have a glorious weekend.
As often happens, this chart is distorted by the “bottom” essentially starting at 60 out of 100.
Are you saying that even Republicans expect inflation to rise, albeit by a tiny amount?
I think you are asking the wrong question. The question you should ask is, “Why does consumer sentiment seem lower now than it apparently was in the spring of 2017?”
I think the dramatic difference between the spring of 2017 and the spring of 2025 can not be explained by partisans gaming the outcome, those springs are both with Trump starting out his presidential term.
A better hypothesis is that Trump had some economic policies in 2017 that gave people more optimism than the policies Trump is currently pursuing.
Well, but if people really knew and understood stuff, they never would have elected Biden.
Maybe people don’t have much knowledge or understanding of objective “stuff.” But maybe they do understand their own subjective sense of optimism/pessimism about where the economy is going.
The difference between spring of 2017 and spring of 2025 is that Trump is pursuing different economic policies in the spring of 2025 compared to the spring of 2017 and this difference has impacted peoples’ subjective sense of optimism/pessimism. Or so it seems. To say that partisans are gaming this survey doesn’t seem to hold up to scrutiny.
But the surveys never seem to be that accurate. It’s like in the past, people would say they were “concerned” because they thought other people were having trouble, but their own spending etc didn’t change. So whether they were “concerned” was basically irrelevant.
The massive tariffs stand out like a big sore thumb.
There are things that Trump is doing that will benefit the economy, such as cutting many federal regulations. Getting off the back of energy companies will also be quite helpful. But a worldwide trade war will likely undo every economically positive thing this administration is doing.
Consumer confidence is a chimera, investor confidence is a groundhog-cam. Polls are the playthings of politicos and headline-writers. Comment sections are the home of unsubstantiated assertions like these.
Well, it doesn’t mean anything until the consumer and investor confidence lose us the midterm elections.
Isn’t actual better economy better than false “customer confidence”? Damaging the economy in order to gin up misguided “customer confidence” in the guise of “the rich are finally paying their fair share!” or whatever, doesn’t seem like the best idea. Some actual understanding of economics might help. So that people don’t have irrational fear that everyone else is somehow doing worse than THEY are, those poor people.
Yes, but ordinary people looking at grocery store prices are not swayed by any customer confidence charts. Paying for goods with one’s own money is a pretty good indicator.
Who is it that you are saying is damaging the economy?
Prices on many items have actually come down where I live. Much of that is likely credited to lower energy costs. But a lot of people foolishly believe that if inflation stops, that means prices automatically go back down to where they were before FJB. And they think it’s Trump’s fault if they don’t. Nonsense. Much of the price increases are simply from currency inflation, and that is “baked in” now.
cEntRal pLAnNing MakEs oUr liVEs beTTEr
I suppose you realize that a deliberate shift to deflation etc, would also be cEntRal pLAnNing?
It would be better than the other way. Far better. If we had private money like we should have, all of it would be deflationary.
pRIvAtE mONeY wOuLD bE TErriblE sO iTs ILlegAL