Are Elections Bad for the Economy?
We're less than a month away from the midterms, and the political noise is getting harder to escape. The ads, the arguments, the endless uncertainty. It's everywhere.
Here's something I've been thinking about. We pay close attention to what we consume with our bodies: the food we eat, the quality of the ingredients, whether it's actually good for us. But what about what we consume with our minds? The headlines, the political fighting, the constant sense that something is up in the air.
And what if that mental diet affects how consumers feel, and ultimately how they spend?
What the data is telling us
I've been tracking consumer sentiment since March 2020, and it has proven to be a leading indicator of the economy. The question is simple: are consumers spending as usual, are they pausing, or are they anxious about spending their money at all?
In September, the share of consumers spending as usual dropped to 20%. That's the lowest number we've seen all year.
What makes it interesting is where we were just a couple of months earlier. In July, that number was 25%.
So what changed? It's worth asking whether the shared excitement of the World Cup gave consumer sentiment a lift over the summer, and whether the wave of political ads and fighting that followed is weighing on it now. Joy has a way of opening wallets. Fear has a way of closing them.
So what? Now what?
For businesses, the lesson is this: give your consumers a reason to say yes.
Consumers aren't simply buying products and services. They're deciding where to spend their money, their time, and their attention. In a season full of noise, every one of those decisions is harder to win.
It all comes back to the thesis I started with six years ago: when joy is greater than fear, economic growth begins.
So, is a political season bad for the economy? It's probably the wrong question. The better question is how you give consumers a reason to say yes to your brand, regardless of who's on the ballot.
Comments