Republicans sour on the economy

Republicans' confidence in the economy has plummeted over the last six months at a pace unseen since Covid — reminiscent of the declines during the global financial crisis nearly two decades ago.

Why it matters: Usually, the president's party is upbeat about the economy, while the party out of power is far more downcast. What's striking now is that Republicans have grown increasingly sour this year, even with a Republican president in office.

• It's another in a long list of ominous indicators for President Trump heading into the final two months before Election Day.

By the numbers: Since February, Republican consumer sentiment has plunged 15.1 index points, from 97.1 to 82, according to the latest University of Michigan Surveys of Consumers data. Democratic sentiment has fallen just 1.6 index points, from 41.8 to 40.2.

• The 82 reading is lower than at any point during either of Trump's presidencies, with one exception: December 2020, after he had lost reelection but before he left office.

Flashback: It's rare for one party's outlook to remain steady while the other's falls — typically they move in tandem. But a similar split occurred during the global financial crisis in late 2008 and early 2009.

Caveat: That period included the election and inauguration of a Democratic president, accounting for some of the Republican decline.

What they're saying: "The vast majority of the time, Republicans and Democrats move broadly in parallel," Joanne Hsu, director of the Surveys of Consumers, told Axios. But that is not the case now.

• "Republicans were expecting very positive results from administration policies" on the economy, including tariffs, she added. "But they haven't seen a slowdown in inflation, let alone" the reduction in prices that Trump promised.

Yes, but: Hsu said it's important to remember that, despite the slide, Republicans still have a much more positive outlook on the economy than Democrats.

• For instance, Republicans still broadly believe gas prices will fall once the Iran war is over, which is not the case with Democrats, she said.

Zoom in: The Michigan survey tracks with other data on how Republicans feel about the economy under Trump, including a July Pew Research poll.

• Forty-one percent of Republicans or Republican-leaning independents called the economy excellent or good — down 8 percentage points from January.
• And the share of Republicans who said Trump's policies have made the economy worse rose from 18 percent to 28 percent. The share who said the policies have improved conditions dropped from 57 percent to 42 percent.

The other side: "The hard data of consumer spending and retail sales have, for months, consistently reinforced that the American consumer remains resilient thanks to the President's proven economic agenda of tax cuts and deregulation," said White House spokesman Kush Desai.

• "As the Administration's economic policies, trade deals, and trillions in investments continue to materialize, Americans can count on more progress to come," he added.

The bottom line: It's no secret that the election will turn on the economy. Inflation remains untamed, and the war in Iran shows no sign of ending.

• Trump has always been able to rely on bedrock support from Republicans, but even that is starting to crack.