As the 2020 general election heats up, key indicators of the stock market are reaching record highs as unemployment remains high and some workers struggle to make ends meet due to the coronavirus pandemic.
The economy is usually a major factor in presidential elections, but the connection between the economy and the stock market isn’t always clear. The S&P 500 recently reached a record high, for example, while the latest jobs data showed unemployment near its high mark during the 2008 financial recession. And leading up to November when President Donald Trump and former Vice President Joe Biden face off on the main ticket, those nuances could play a big role in how the election shakes out.
Overall, voters are more likely to believe that the economy is recovering, compared to where it was when businesses shuttered and life was brought to a standstill this spring. Forty-three percent said in an Aug. 21-23 Morning Consult/Politico poll that the economy is recovering amid the S&P 500 record high last week and the unemployment rate of 10.2 percent, although nearly one-third of respondents (32 percent) said it is recovering “slowly.”
One in 3 voters think the economy is getting worse to some extent, with 22 percent saying it is worsening slowly and 11 percent saying it is worsening quickly.
The poll surveyed 1,992 registered voters and has a margin of error of 2 percentage points.
As with many measures of consumer sentiment on the economy, the results were partisan-driven. A majority of Republicans (65 percent) said the economy is recovering, compared to 28 percent of Democrats. Democrats were also far more likely to believe that the economy is worsening, at 48 percent, compared to Republicans at 15 percent.
Independents’ sentiments were roughly in the middle, with 4o percent saying the economy is recovering and 35 percent saying it’s getting worse.
The difference between what is going on between Wall Street and Main Street hasn’t gone unnoticed by economists, who note aggressive action by the Federal Reserve to buoy markets, and movement by Washington to provide unemployment benefits, eviction moratoriums and stimulus checks to consumers, as factors that have influenced how finances have reacted to the stress caused by the pandemic.
But now, with those benefits for consumers expired and running out, it’s still an open question as to how voters will process the issue.
For the most part, Morning Consult data suggests that most voters are likely to see the economy and the stock market as connected. Sixty percent said the two are closely related, compared to 21 percent who said they are not really connected.
Those results are also somewhat driven by partisanship: 27 percent of Democrats said the stock market and economy aren’t really related, compared with 13 percent of Republicans and 22 percent of independents. Fifty-three percent of Democrats said they are closely related, while 70 percent of Republicans and 55 percent of independents said the same.