January 21, 2025
Joanne Hsu discusses the political divide in consumer sentiment
While the overall economy is good – inflation and unemployment are down and wages are up – consumers have not been feeling great. Now that political power is changing, so is spending and consumer sentiment.
Joanne Hsu told Marketplace, “Republicans believe Trump’s policies are going to usher in growth, lower inflation in the future, whereas Democrats are quite worried that inflation’s going to come surging back…Republicans are spending out of confidence, Democrats out of fears that things are going to get worse. If you think prices are going to go up in the future, then now is the time to buy.”
The Financial Times looked at what people’s inflation expectations are under the Trump administration. Dr. Hsu says responses to the Surveys of Consumers are not just an expression of political opinion: “It is a difference in what people are thinking Trump’s policies will bring to the economy. These are legitimate. People are expressing their views in the survey and acting on them with their wallets.”