U.S. consumers are bracing for a polarizing year in politics. From impeachment proceedings to the presidential election, emotions are high, but unemployment is low, and that appears to be the economy’s saving grace as we head into 2020. Now in its fifth year, our annual consumer sentiment report, ThinkNow Pulse™, provides insight into how Americans feel about the state of the economy, its impact on their household income, and how the political climate influences their economic outlook. We compared this year’s data with past years and found interesting shifts in sentiment among key demographics.
Economic Outlook Flat
While more people, in general, believe that the economy is growing, the proportion of Americans who expect the economy to be better than a year ago, is statistically flat. Similarly, more Americans than last year expect no changes in their finances over the next few months.
Household income did improve for one-third of Americans last year, but just as many consumers stated that their household income stayed the same. Over the past five years, income peaked in 2016, but experienced a sharp decline in 2017, perhaps a result of the change in the presidential administration, when uncertainty loomed. As things settled down in subsequent years, the outlook on household income rebounded.
Thirty-nine percent of Non-Hispanic Whites report that household income improved from one year ago. Hispanics, however, saw the most significant increase in income over the past year.
But, 50% of Asian Americans reported that their household income remained stable. This isn’t uncharacteristic, however, as about half of Asian Americans have reported seeing no change in household income for four of the past five years and are less optimistic about their household finances this year than any other cohort.
Non-Hispanic Whites are less optimistic than last year about the direction of their finances this year, with most reporting that they expect their finances to remain stable in 2020.
Nearly 60% of Americans report not experiencing any work-related losses this past year, including job loss, reduced work hours, or salary reduction. Yet, while unemployment hovers around 3.7%, minorities are most likely to have lost a job or experienced a decrease in work hours over the past year.
Yet, 58% of Americans believe that the U.S. economy is growing, the highest percentage in five years.
Heading into election season, the temperature of American voters tops the list of campaign priorities, for the incumbent and his opponent, whomever that will be. Our study shows President Trump’s approval rating at 39% among American voters.
Typically, the more positive consumer sentiment is, the higher the president’s approval rating. Nearly half of the Total Market, however, disapproves of the job the president is doing. As expected, those who approve of the president have a significantly more positive outlook on the economy.
Hispanics Most Optimistic
Overall, positive sentiment is highest among Hispanics. They expect to see an increase in household income this year and maintain a more positive outlook on the economy in general. And the current political climate has a positive impact on their personal outlook, despite heading into a contentious election season.
While more Americans believe that the economy is growing, consumers, in general, are not convinced that the growth will translate into more dollars for their households. We see this conservative view play out across the Total Market with little change in financial outlook occurring over the past five years. But a micro view of the data exposes cracks in this resolve, revealing an energized Hispanic base and less pessimism among African Americans.