The Golden Age Has Dawned
Americans, with a buoyancy unseen in years, are exhibiting a rekindled confidence in the trajectory of the U.S. economy—most notably in its capacity for growth, the fortitude of its financial markets, and the direction of their household finances.
The latest polling from YouGov for the Economist finds that 36 percent of Americans now say that they expect their household to be better off financially a year from now. That’s up from 28 percent prior to the election.
This surge in optimism has occurred across the economic spectrum. In the pre-election YouGov survey, taken between September 29 and October 1, 23 percent of Americans with incomes under $50,000 said they expected to be better off. Now 30 percent expect improvement. For those earning between $50,000 and $100,000, the share expecting to be better off is up from 29 percent to 42 percent. Among higher income Americans, the share is up from 33 percent to 42 percent.
Both sexes report increased optimism. Among men, the share expecting to be better off is up from 31 percent to 40 percent. Among women, it’s up from 25 percent to 33 percent.
Democrat Pessimism, Republican Optimism
There has, of course, been a partisan flip in expectations. Back at the end of September, 40 percent of people who said they planned to vote for Harris said they expected to be better off one year from now. In the most recent poll, just 18 percent do. Among those who were planning to vote for Donald Trump, only 18 percent expected to be better off in the September-October poll. Now 64 percent of Americans who voted for Trump expect to be better off.
The best way to understand this partisan divide is that Republicans are now more optimistic than Democrats were prior to the election. It’s likely that many Republicans were somewhat pessimistic about Trump’s chances in the November election. So, his victory comes as an upside surprise.
There’s also a generation gap in optimism. In the September-October poll, 46 percent of Americans between 18 and 29 said they expected to be better off. Now just 36 percent do. But among every other age cohort, optimism is on the rise. Among Americans between 30 and 44, the percent saying they expect to be better off is up nine points to 38 percent. Among those between 45 and 64, it’s up 12 points to 37 percent. Among older Americans, it is up 15 points to 30 percent.
These changes in expectations are likely to have real-world economic impacts. Increased optimism encourages more spending and investing. That’s especially true when the groups seeing the biggest increases in their levels of optimism are older and are more likely to have more disposable income.
Gallup’s survey also shows rising optimism. Let’s start with the stock market. Sixty-one percent of Americans say that they think the stock market will go up over the next six months, nearly twice as many as forecast a rising stock market when Gallup last asked the question in January of 2023. Just 18 percent think the stock market will decline, down from 48 percent in 2023.
Fifty-three percent say they expect the pace of economic growth to go up, up from 36 percent in January 2023. Twenty-nine percent expect lower growth, down from 43 percent.
The share expecting higher inflation over the next six months has fallen to 52 percent from 67 percent in January 2023. That is the lowest share expecting an increase in inflation since 2003. This suggests that recent increases in the average expectation for inflation picked up by the University of Michigan’s consumer sentiment survey is being driven by a narrow group fearing the impact of tariffs rather than a spread of inflation fears.
“Republicans and independents are more optimistic that all five aspects of the economy [stocks, unemployment, growth, interest rates, and inflation] will improve than they were in January 2023, the last time the question was asked. This was at the midpoint of former President Joe Biden’s term. Slightly more Democrats now than in 2023 expect the stock market to increase and interest rates to decrease, but far fewer now expect economic growth, inflation and unemployment to improve,” Gallup News explained.
A nation’s economic outlook is, at its core, a measure of its faith in the future. And for the first time in years, Americans are daring to believe again.
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