The U.S. economy is growing faster than expected but nearly three-quarters of Democrats are convinced that a recession is likely next year.
Seventy-four percent of Democrats think a recession is likely next year, according to the most recent Gallup survey. Just 24 percent rate the economy as excellent or good. Only 17 percent think economic conditions are improving.
Those views run contrary to economic indicators. Federal Reserve official notched up their view of economic growth this year and expect the economy to grow between 1.8 percent and 2.2 percent next year. Unemployment is near historic lows and the economy continues to generate more jobs than expected.
Existing home sales were reported running far above estimates. Housing starts came in at the strongest pace since 2007. Even manufacturing, which had weakened earlier in the year, appears to be on the rebound. The Philadelphia Fed’s index of manufacturing business activity in September showed that factory activity continued to expand at a moderate pace. Industrial production is running much hotter than expected.
A survey of economists in August found just 38 percent think a recession will strike next year.
Republicans are more upbeat. Just 21 percent expect a recession over the next year. Seventy-eight percent rate current economic conditions as good or excellent. Eighty-three percent say the economy is improving.
Independents are evenly divided between pessimism and optimism. Fifty percent are predicting a recession. Forty-seven percent rate the economy good or excellent. Forty-three percent say things are getting better.
The intense pessimism of Democrats dragged down Gallup’s index of economic confidence in the most recent survey. It is now at its lowest level since January, when confidence sank during a partial shutdown of the federal government. Despite the decline, the Gallup index is still at much higher levels than it was for a decade before the election of Donald Trump.
The share of people rating the economy as excellent notched up to 15 percent in the most recent survey. Prior to last, this figure rarely hit the double digits. It averaged just 1 percent during Obama’s presidency. The share rating the economy as poor is down to 14 percent, close to all time lows for this measure. In the last year of Obama’s presidency, 28 percent said economic conditions were poor.