Economic Gloom Is Spreading to Trump’s Voters

Americans are increasingly gloomy about the U.S. economy.

The Conference Board said Tuesday that its index of consumer confidence fell in May. It wasn’t all bad news, however. While views of the present situation fell, the outlook improved slightly. Views of labor market conditions and business conditions six months from now are still pretty dismal, but they improved a bit in May. The year-ahead inflation expectation measure also improved.

Last week’s consumer sentiment survey from the University of Michigan delivered a much bleaker picture of consumer views of the economy. Its index fell to an all-time low, with both the outlook and the view of current conditions worsening. Year-ahead inflation expectations also worsened.

Why the divide? The University of Michigan’s measure is very focused on what we used to call “pocketbook issues,” like whether it is a good time to buy a major appliance. This makes it much more responsive to changes in inflation. The Conference Board’s measure is more focused on labor market conditions—how easy is it to find a job—and broader business conditions. It’s possible the University of Michigan’s spending-focused questions influenced the view of inflation expectations.

Gallup has its own index, which it calls an economic confidence index. This also worsened in May, falling to its worst level since 2022, when Bidenflation was rampaging through the economy and real household incomes were contracting. The Gallup ECI is now at -45. That’s above the June 2022 low of -58 but in line with some of the lowest months of the Biden administration. Gallup said the May decline was caused by a fall in both the assessments of current conditions and the assessments of whether the economy is getting better or worse.