Democrats took a rosier view of the US economy last month after Vice President Kamala Harris entered the presidential race.
The University of Michigan’s sentiment index for Democrats rose to 90.9 in August, up from 83 in July, according to figures released Friday. A gauge of expectations among Democrats, which measures how consumers view their personal financial situations and prospects for the economy, increased to 94.0 in August — the largest gain since 2022.
The shift marks a turnaround from the previous month when both gauges for Democrats fell to the lowest level in over a year, following President Joe Biden’s poor debate performance against Republican nominee Donald Trump.
Harris’ entry into the race has boosted Democrats’ hopes of holding onto the White House. She’s leading or tied with Trump in the seven battleground states that are most likely to decide the election, according to the latest Bloomberg News/Morning consult poll this week, after making up ground with key voting blocs including younger Americans.
“These patterns reflect a sea change in election expectations this month with Harris emerging as the Democratic candidate,” Joanne Hsu, director of the University of Michigan survey, said in a statement. In July, more consumers expected Trump to win the election when Biden was running but those figures flipped in August with more now predicting a Harris victory, Hsu said.
Historically, consumers who support the party in power typically view the economy more favorably than those who support the opposing party.
Sentiment among political independents rose for the first time since January, to 62.2. Among Republicans, consumer sentiment fell to a nine-month low and expectations also declined. The overall sentiment index rose slightly to 67.9.