Partisanship Colors Consumers’ Views of Personal Finances

Consumer sentiment is down year-to-date, but it’s too early to tell how it affects near-term purchasing intentions

The U.S. Index of Consumer Sentiment (ICS) fell in February. While the drop was not as substantial as in Canada, which saw its index fall 6% month over month, there has been a clear and sustained turn in sentiment for the U.S. consumer. 

Aside from a slight uptick in the first half of the month, the general trajectory of the index was down throughout the month. In the first few days of March, the index continued to drop. On March 5th, the index stood at 98, not too far above 96.3, where it was before President Trump’s election victory. Morning Consult’s ICS consists of five questions, mirroring the University of Michigan’s consumer sentiment measure. Since the beginning of this downturn shortly after the presidential inauguration in January, not every index has been behaving similarly. The indexes focusing on current conditions have been mostly stable or increasing, while those asking about future conditions have dropped precipitously.

This signifies that while U.S. consumers’ views on the economy have become more negative, their pessimism is mainly about the future at this point. The ICS has two subindexes centered around current conditions rather than future expectations: current buying conditions and current conditions for personal finances.

The current buying condition question, which asks respondents whether it is a good or bad time to buy major household items, has been relatively stable and just began to drop this week; therefore, it is too early to tell if President Trump’s tariffs on Canada, Mexico, and China are changing U.S. consumers’ views on timing for purchases.

Recent views on current personal finances are heavily colored by political party affiliation

The personal finance current conditions index is the only subindex showing increased optimism about the economy, specifically about consumers’ finances. The question asks consumers whether they and their families are better off financially than a year ago. It is important to note how these indexes are calculated. The share of negative responses is subtracted from the positive responses; 100 is added for the data's ease of interpretation and interpolation. However, the response options for the survey question also include “the same” and “don’t know/no opinion.”  While the responses for “worse” have been falling and responses for “better” have been rising, the response “same” that is not used in the index calculation has also seen an increase.

It is not the first time that “same” responses have risen or fallen. Previous movements when responses for “same” rose include the onset of the pandemic five years ago and as inflation began its ascent in early 2021. 

The timing of this ascent for “same” response, as well as the increase for “better” and drop for “worse,” aligns with President Trump’s election victory. Therefore, unlike the previous times when macroeconomic conditions or an exogenous event most likely moved this index, this time, its movement seems to be driven more by partisan views coloring consumers’ perception of their finances. The broad macroeconomic indicators are not materially different from the beginning of November. In fact, some measurements, such as consumer spending growth, are not as strong as last November. 

However, after the elections, Republicans increasingly felt “better” or the “same” about their personal finances compared to last year, with the share of “worse” dropping from 56.3% on Nov 4, 2024, to 26.5% on March 6, 2025. At the same time, those who feel the “same” jumped from 29.8% to 40%. While a similar flip has happened before–most notably when the pandemic began–the change in perceptions was not as pronounced, and those who felt the “same” moved minimally.

The magnitude of these changes (as expected) is in the opposite direction for Democrats, but they are not as large. Independents' views on finances align in the same direction as Republicans: a lower share views their conditions as “worse,” and a higher share views them as “same” or “better.” 

At this point, partisan politics seem to be driving the change in consumers' feelings about their finances more than macroeconomic events. As a result, it is hard to tell if this upward trend in current conditions for personal finances will translate into higher spending levels.  Morning Consult’s Consumer Health Index uses this component as one of the drivers for demand, as it has correlated well with official government statistics on spending. If consumers feel positively about their finances compared to a year ago, it would be easier for them to increase their spending levels. However, if the index is more of a reflection of approval or disapproval of the President, its strength in predicting demand may not be as strong. It remains to be seen whether Republicans’ optimism about their finances will translate into higher spending.

Noncitizens' and government employees’ sentiment continue to decline steeply after the inauguration, and the resulting policies

This is not to say that partisanship is the only metric driving ICS at the moment. In fact, various demographic cuts of the data (PDF attached) show a nuanced yet downward trajectory. The final one we will point out here will feature those employed by the government and noncitizens. President Trump’s policies on trimming down the government workforce, as well as increased raids to deport undocumented workers, are also showing up as downwardly shifting consumer sentiment for these communities. These communities’ ICS scores have generally been higher than respondents at the “all adults” level. The magnitude of the drop is substantial. Unlike the party identification demographic, the drop began right after President Trump's inauguration rather than his election, pointing more directly to the effects of his policies on these cohorts.