The most underappreciated fact of the election: Americans feel good about the economy

These upward trends among lower-income people are all the more striking because, as of 2014, their income had not recovered as much from the Great Recession as had the incomes of the relatively wealthy. One explanation for this involves the frame of reference in the Index of Consumer Sentiment, combined with the most recent trends in family incomes. The index asks respondents to evaluate their financial situation compared with a year ago. And as of 2014, the trend in incomes in the previous year was positive for almost every income group. Even if family incomes had not fully recovered from the recession, they were recovering nonetheless.

These short-term trends are especially important because of how the economy typically matters in elections. Previous research shows that voters are much more sensitive to election-year trends in the economy than its long-term performance. This myopia means that even if many Americans’ incomes were below their pre-recession levels, the positive trend would be more electorally consequential.

These trends in consumer sentiment are not the end of the story, of course. What is equally striking about this election year is how little this growing economic optimism has affected broader assessments of the direction of the country or even presidential approval — although that may be changing now, as Obama’s approval has increased in the past four months or so.