Trump’s Election Victory and Its Impact on Economic Sentiment

Donald J. Trump emerged victorious in last week’s election, largely by pledging to restore an economy that many voters felt was faltering. This promise appears to have resonated particularly well with Republican voters, as evidenced by a significant increase in their consumer sentiment.

According to data from Morning Consult, an online survey firm, consumer confidence among Republicans has surged nearly 30 percent since Election Day. This newfound optimism marks the highest level of economic sentiment among Republicans since Trump lost his re-election bid four years ago.

In stark contrast, the response from Democratic voters has been markedly negative. Consumer sentiment within this group has plummeted by 13 percent since the election, dipping to its lowest point since early 2023. Meanwhile, political independents have shown relatively stable attitudes regarding the economy, indicating minimal change in their perspectives.

These significant partisan shifts in economic outlook are not unexpected. Historically, similar swings have occurred following past presidential elections, though the trend has intensified in recent years. Voters have consistently indicated that their economic expectations are influenced by the electoral outcome, as noted by Joanne Hsu, director of the University of Michigan’s well-regarded consumer sentiment survey.

“Consumers have been telling us all year long that their outlook for the economy hinges on who wins the election,” Hsu explained. She anticipates noticeable partisan variations in her survey data as well, once post-election figures are released this month.

Throughout President Biden’s administration, measures of consumer sentiment have largely been subdued. However, economic indicators such as low unemployment rates and wage growth have suggested a robust economy. Nonetheless, many Americans have pointed to inflation as a primary source of their discontent with Biden, even as inflation rates have begun to decline.

In recent months, economic sentiment has shown signs of improvement, possibly indicating that more Americans are beginning to recognize positive changes in inflation as they navigate their daily lives—albeit too late to benefit Democrats in this election cycle.

Deni Koenhemsi, head of economic analysis at Morning Consult, noted, “Consumers are likely noticing and, to some extent, processing some of the positive economic news.” She highlighted that consumers’ expectations have risen more swiftly than their evaluations of the current economic situation. This suggests that while many are still grappling with high prices, their outlook for the future is becoming increasingly optimistic.

This gradual shift in sentiment is not surprising, according to Neale Mahoney, an economist from Stanford University who previously worked in Biden’s administration. In research published last year, Mahoney and a colleague found that consumer sentiment takes time to adjust as inflation decreases, and individuals acclimatize to the new, elevated prices of essential goods and services.

“Even if measured inflation is on the decline, people’s lived experience of inflation may still be adjusting to the steep price increases that peaked during the summer of 2022 into 2023,” Mahoney observed. He also pointed out that the election could serve to expedite this adjustment process, especially for Republicans, who may be more inclined to recalibrate their expectations now that their preferred candidate is in office.