Americans have been feeling bad about their finances for years now. This is despite decreasing unemployment, growing GDP, and a climbing stock market. But feelings about money can often have little basis in financial fact, a point proven in a recent poll from Gallup.
The poll, released on Wednesday, shows that Republicans are feeling much rosier about their financial status, while Democrats are feeling much more grim since the election of Donald Trump. The swings in sentiment are both sudden and significant. For instance, in October of last year, only 34 percent of Republicans said they were feeling better about their financial situation. By February that share climbed to 77 percent. During that same period, Democrat’s perception about their financial situation declined, with only 43 percent saying that they were feeling better about their finances, down from 71 percent in October. That pattern—of significantly increasing optimism among people who lean toward the GOP and decreasing optimism among those who lean liberal—was apparent in just about every question that Gallup asked about personal finances.
There are plenty of reasons that Americans might have differing views about their financial status. On the one hand, the economy has been steadily strengthening for years now, unemployment is down, and the stock market has been on a relative upswing for some time. Even in a sluggish recovery, some households have been doing better and better. It’s also true that a lot of that economic improvement isn’t being felt by many workers: Wages have been relatively stagnant for years, and labor-force participation among men remains mysteriously low. All the while, the price for necessities, such as housing, has climbed. That’s enough to make the many Americans who are living paycheck-to-paycheck feel financially strapped. But while both viewpoints can be justified, it’s hard to justify a stark and sudden shift, positive or negative, about one’s personal finances in such a short period of time. Aside from continued improvement in the stock market, the economy hasn’t changed all that much between October and February. In fact, the only significant change has been who is sitting in the Oval office.
The changing views on money line up directly with the presidential swap. To conduct their poll, Gallup asks Americans 13 questions about their personal finances on a daily basis. Through that technique, they can pinpoint when sentiments started to change. While Republicans and Democrats started slightly shifting their perceptions about their finances in November, as soon as Donald Trump won the presidency, the positivity of Republicans didn’t far surpass that of Democrats until February—Trump’s first full month in office.
In October of last year, 44 percent of Republicans said they felt good about the amount of money they had to spend. In February of 2017—just four months later—that share climbed to 70 percent. When asked that same question in October, 61 percent of Democrats responded positively. In February, only 51 percent did. Republicans also say they aren’t cutting back on weekly spending as much as they did before, while Democrats are being more careful. In just about all categories, the sharp increase in Republican positivity outpaces the growing pessimism among Democrats. When asked about being able to make a major purchase, such as a car, 71 percent of Republicans now feel confident about doing so. Only four months ago 57 percent of Republicans felt like they could spare money for a big purchase. The share of Democrats who said they could afford such a purchase was about the same during the four month span.
A similar spike in positivity happened among Democrats in the months following President Obama’s election. The changes reflect confidence that a new administration will look after one’s personal interest more than the previous administration did. Trump has promised Republicans that their financial interests—lowering taxes, boosting businesses, and eliminating government intervention and regulation—will be catered to. Democrats, and the more diverse group that make up their base, fear that the changes Trump and his administration will halt progress on the economic changes that they have long sought: increased minimum wage, safer banking systems, and stronger, broader safety net protections.
The climbing optimism numbers also reflect the relative newness of the administration. Trump has made lots of pledges to the Republican base and they are hopeful that he will deliver. If he can’t, the Trump bump in optimism might face a hitch similar to the one seen in the stock market this week.