Economy

The latest reading of a gauge of consumer sentiment indicates an “unprecedented partisan divergence” between how Republicans and Democrats see the economy.

The University of Michigan said its final reading of consumer sentiment was 96.3 in February, up from the preliminary reading of 95.7 earlier this month but down from the January final reading of 98.5 that was the highest since January 2004.

Economists surveyed by The Wall Street Journal had expected a February reading of 96.

“The recent rise in optimism reflects a turnaround from consumers’ attitudes in October, when sentiment had matched a two-year low,” the Journal reported, noting that the index’s three-month average is the highest it has been for nearly 13 years.

The forward-looking index of consumer expectations is up 5.6% from February a year ago, and the index reflecting sentiment on current economic conditions rose 4.4% from February last year.

The survey’s chief economist, Richard Curtin, said the apparent implication would be that “consumers expected [Donald] Trump’s election to have a positive economic impact” on the economy.

In fact, he said in a news release, the gain “represents the result of an unprecedented partisan divergence, with Democrats expecting recession and Republicans expecting robust growth. Indeed, the difference between these two parties is nearly identical to the difference between the all-time peak and trough values in the Expectations Index, – 64.6 versus 64.4.”

“While the expectations of Democrats and Republicans largely offset each other, the overall gain in the Expectations Index was due to self-identified Independents, who were much closer to the optimism of the Republicans than the pessimism of the Democrats,” Curtin added.

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