However, we also found that the downward drag from inflation has a half-life of about a year. While prices rose only 3.2 percent this year, they increased by a cumulative 18.6 percent over the last 3 years, and these prior price increases are still weighing negatively on consumers. Second, consumer sentiment is being dragged down by prior years’ inflation. While both Democrats and Republicans rate the economy more strongly when their party controls the White House, Republicans cheer louder and boo harder, in effect, drowning out Democratic voices and artificially depressing consumer sentiment. First, sentiment isn’t as bad as the numbers suggest due to partisan skew. Ryan Cummings, a visiting PhD student at Stanford, and I recently dived into the data and documented two new findings. Given the strong correlation between consumer sentiment and election outcomes, it’s especially important to understand why there’s a disconnect ahead of this November’s vote. Yet consumer sentiment is decidedly weak, with measures of the economic indicator at levels last seen during the global financial crisis. economy is strong by all objective measures, with low unemployment, robust GDP growth, and easing inflation. Shultz Fellow at SIEPR and Professor of Economics, School of Humanities and Sciences:
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |