Dispel from your mind the notion that the unemployment rate, by itself, drives voter opinions on the economy. A significant number of Americans’ perceptions of the economy are faith-based, or at least based on beliefs that are entirely separate from what the actual data say.
There is some dispute among political scientists as to when, precisely, Americans began to perceive whether the economy was improving or worsening through such an intensely partisan lens.
Andrew Gelman, a professor of statistics and political science and director of the Applied Statistics Center at Columbia University, cites an example from 1988, finding that Republicans and Democrats had completely different perceptions regarding inflation:
Only 25% of Democrats (compared to 70% of Republicans) surveyed in 1988 thought that inflation had improved in the previous 8 years. Another interesting question is why only 70% of Republicans knew about the trend in inflation, but in any case we’re seeing huge partisan differences about an essentially factual question. (Yes, you can argue about the details of the definition of inflation, but by any measure it seems pretty clear that inflation declined between 1980 and 1988. My best guess at why people got this wrong is based on a conversation I had with Eric Snowberg and Rod Kiewiet, who conjecture that, when asked about the rate of inflation, people often respond by telling you about prices. From 1980 to 1988, prices went up, so it might be natural for some people to think this meant that inflation had gone up. Again, though, the point is that there are big differences between Democrats and Republicans in how they responded to the question.)
Elsewhere Gelman pointed out that in late 2008 and early 2009, poll respondents’ consumer confidence seemed at least partially tied to whether their preferred party was in the Oval Office: “ABC News surveysshow that the views of Republicans became 19 points more negative between October and mid-April. Meanwhile, the views of Democrats improved by 10 points, even as the economic news became grimmer.”
This phenomenon occurs at the state level as well as the national level. The Marquette Law School Poll found that as the Wisconsin recall election approached in May, Republicans and Democrats felt about the same on the economy: “Between a quarter and a third of voters in each party thought the economy was improving; between a quarter and a third of voters in each party thought it was worsening.” The poll did not specify whether it was asking about the state’s economy or the nation’s economy. Charles Franklin, who conducts the Marquette Poll, conjectured that Republicans believed Governor Scott Walker had Wisconsin on the right track, but that the national economy was in bad shape; Democrats felt that Walker was performing poorly but that President Obama was turning things around nationally.
Now, with the presidential election approaching, responses in Wisconsin have suddenly diverged; 45 percent of Democrats now say the economy is improving, and just 7 percent say it is worsening; among Republicans, just 7 percent say it is improving, and 63 percent say it is worsening — a dramatic shift in four months.
Gallup has found that in recent weeks Democrats have grown much more confident about the economy, and independents a bit more confident, while Republicans are still quite pessimistic: “The Economic Confidence Index among Democrats had been ambling along at around +10 from August through early September. Then, in the week ending Sept. 9, spanning the Democratic National Convention, it surged 18 points to +24 and has since averaged +20 or better. A similar pattern has occurred among Democratic leaners, with a 22-point surge in confidence during convention week. Confidence rose somewhat less sharply, up 13 points, among independents who do not lean toward either party (‘pure independents’), while it has held steady at very low levels among Republicans and Republican-leaning independents.”
Gallup concludes, “Right now, politics is playing an inordinately large role in the behavioral economic data.”
So that explains why Democrats feel good about the current state of the economy, with its 8.1 percent unemployment rate, its 1.3 percent GDP growth, its gasoline averaging $3.79 per gallon, and median household income continuing to decline even after the recession technically ended. But what about the 10 percent that Gallup considers “pure independents,” who lean toward neither party?