Below is a complimentary Demography Unplugged research note written by Hedgeye Demography analyst Neil Howe. Click here to learn more and subscribe.

New Pessimism About Future of Pandemic - 7 14 2020 11 00 33 AM

Views of the pandemic are growing increasingly negative, with 49% of American likely voters believing that it’s going to get worse. A month ago, that share was 35%; the spike in pessimism was driven the most by respondents in the South and West. (Financial Times)

NH: The findings of the FT survey (carried out jointly with the Peter G. Peterson Foundation) are corroborated by several other recent polls.

Bottom line: Over the last month, Americans are becoming more pessimistic about whether the pandemic is getting better or worse; about how long it will last; and about its long-term impact on the economy. The shift has come after nearly four weeks of rising daily case numbers--and after nearly one week of rising daily death numbers

From late May to late June, according to FT, the share of Americans who say that the pandemic is getting worse “in their community” rose from 35% to 49%. The share saying getting better dropped from 39% to 25%. Regionally, the trends show the biggest rises in the West and South. The East was the only region in which “better” was (slightly) higher than worse.

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Gallup surveys, likewise, show a steep rise in the share of Americans who say the coronavirus situation is getting “worse” nationally, from 30% at the beginning of June to 68% today. It also shows a declining share saying, in the absence of public restrictions, that they would return to normal activity “now”; and a rising share saying they will wait until a vaccine is developed.

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According to Economist/YouGov, an impressive 77% of Americans now agree that daily new cases will continue to increase. And 47% say “the worst” is still ahead of us--while only 19% say it’s “behind us.” Per NBC News/Survey Monkey, 63% say businesses are reopening too quickly. Only 33% said too slowly.

A sizable majority (57% to 32%) supports “closing state economies again.” Asked when it will be safe to reopen the economy nationally, “several months” (29%) or “a year or longer” (26%) were the dominant views, along with “not sure” (19%). Only 19% of all voters (and 34% of Republicans) say either “right now” or “in a couple of weeks.” 

With their outlook on the pandemic darkening, it is no surprise that Americans are somewhat less optimistic about the economy. Over the past month, finds the FT, the share of Americans who think the economy will “fully recover within a year” has dropped from 42% to 37%. The share saying “more than a year” rose from 58% to 63%. Though “global economic slowdown” remains the biggest threat to most people, “healthcare costs” and “other reasons” have been rising--perhaps a reference to the threat of longer domestic suppression due to the pandemic.

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What about extending the CARES benefits beyond July 31? Overwhelmingly, Americans want them extended. Roughly 50% “strongly” support extension, and less than 10% “strongly” oppose extension. Party leaders on both sides need to be careful about how they negotiate an agreement on further stimulus before the August recess. Neither side will want to be blamed for failure to come to an agreement.

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How is this mood shift likely to affect the 2020 election? That’s hard to say. So long as the GOP can avoid blame for spoiling another stimulus surge--and the president will surely twist arms in the Senate, if need be, to keep the debt-financed benefits flowing--Trump may be able to sustain his relatively high ratings on the economy.

Remarkably, for a president presiding over an unprecedented plunge in employment and output, Trump continues to get higher ratings on “the economy” than on any other aspect of his leadership. Some Democrats worry that it’s the one issue where he bests Joe Biden, both nationally and in most swing states. Much of this approval may be due to the very generosity of monetary and fiscal stimulus, which continues to shield most middle-class Americans appreciable harm to their income and net worth. In April and May, disposable personal income climbed sharply and (according to some estimates) the national poverty rate may have actually fallen.

The downside for Trump is that, in practically every other respect, most Americans don’t like his leadership. And, as the expected duration of the pandemic and recession grows longer, an unprecedented share of voters are adopting an extremely dire view of America’s future. According to Pew, 71% of Americans now say that thinking about the state of their country makes them “angry.” Only 17% say “proud.” By at least a two-to-one ratio, every demo (by age, gender, race, or party) agrees that the coronavirus has “divided” rather than “united” America. Spin that how you may, that can’t be good news for the incumbent leader.

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As I observed a couple of weeks ago, temporary protection from income and financial losses, while welcome, is doing nothing to make Americans any happier about where their country is headed. (See “America is Registering Record Levels of Unhappiness.”)

Right now Trump is running a wide 15 percentage point deficit in his overall approval rating and is 20 percentage points behind Biden in futures markets. Overwhelmingly, voters trust their governors over the president with the decision of whether or not to reopen the economy.

Can Trump still turn things around? Maybe.

But the ongoing bad news on the pandemic will make it a steep uphill battle.

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Neil Howe is a renowned authority on generations and social change in America. An acclaimed bestselling author and speaker, he is the nation's leading thinker on today's generations—who they are, what motivates them, and how they will shape America's future.

A historian, economist, and demographer, Howe is also a recognized authority on global aging, long-term fiscal policy, and migration. He is a senior associate to the Center for Strategic and International Studies (CSIS) in Washington, D.C., where he helps direct the CSIS Global Aging Initiative.

Howe has written over a dozen books on generations, demographic change, and fiscal policy, many of them with William Strauss. Howe and Strauss' first book, Generations is a history of America told as a sequence of generational biographies. Vice President Al Gore called it "the most stimulating book on American history that I have ever read" and sent a copy to every member of Congress. Newt Gingrich called it "an intellectual tour de force." Of their book, The Fourth Turning, The Boston Globe wrote, "If Howe and Strauss are right, they will take their place among the great American prophets."

Howe and Strauss originally coined the term "Millennial Generation" in 1991, and wrote the pioneering book on this generation, Millennials Rising. His work has been featured frequently in the media, including USA Today, CNN, the New York Times, and CBS' 60 Minutes.

Previously, with Peter G. Peterson, Howe co-authored On Borrowed Time, a pioneering call for budgetary reform and The Graying of the Great Powers with Richard Jackson.

Howe received his B.A. at U.C. Berkeley and later earned graduate degrees in economics and history from Yale University.