After a year + of drinking from a political news fire hose, we’ve made it to December 2024 and the US election is now behind us, for better or worse. With much talk about how polarized America is and much fear and optimism (depending on your leanings) dominating the conversation as we look ahead to 2025, we were curious how Americans are feeling right now and how the recent outcome of the election may impact spending looking to the new year.
LOOKING BACK ON 2024
Before we get into 2025 predictions, lets take a look at where we stand today:
What we see, at a high level, are some big differences between political party affiliation, but not in the way that we expected…
Who’s the happiest looking back on 2024? Republicans
Who’s more excited for the holiday season this year compared to last? Equal between Republicans & Democrats
Who’s less enthused about 2024 & the holidays overall? Independents
LOOKING AHEAD TO 2025
Now let’s look ahead to 2025. How optimistic are people feeling about 2025?
Well, maybe not surprisingly, it’s a mixed bag. 79% of Republicans are feeling optimistic while only 50% of Democrats and 52% of Independents are feeling the same.
What’s the primary driver to their 2025 outlook?
Overwhelmingly it is the new Presidential administration taking office.
The incoming administration is the primary driver for Democrats’ 2025 pessimism (71%) and for Republicans’ 2025 optimism (58%).
But as we dive in further, some other interesting insights emerge, mainly with the groups that are “against” the status quo of their affiliated political party:
Democrats with a positive 2025 outlook cite relationships and connections, along with family and their health & well being as drivers to optimism.
Republicans with a neutral to negative outlook to 2025 cite personal & family circumstances, health & well-being, and relationships & social connections as primary drivers for pessimism.
So, optimistic Democrats are rallying around community and taking care of themselves while pessimistic Republicans may feel that their connection to their community and overall health will be more of a stress factor.
ECONOMIC OUTLOOK
Now that we have a better understanding of people’s 2025 mindsets, the biggest question we had was its impact their economic outlook and ultimately, their spending.
The economic outlook for the coming years under the new presidential administration is highly polarizing with 59% of Republicans having a very positive view vs. only 8% of Democrats and 18% of Independents.
We expected the above outcome, maybe not as extreme as the data played out, but the next question was more interesting. How will it impact their spending over the next year on non-essential items like travel, technology, etc.?
Democrats are most polarized with roughly a third expecting increases in spending and 41% saying they’ll spend less. Almost half of Republican’s are going to spend while just 16% say they’ll pull back. Independents are split with roughly a quarter saying they’ll spend more and a third saying they expect to spend less.
While we don’t have a definitive explanation for whether higher spending is driven by concerns that potential tariffs or inflation might raise non-essential prices, we do observe some interesting patterns when comparing spending intentions between those with a positive outlook on 2025 and those with a neutral or negative one.
Regardless of political affiliation, individuals with a positive outlook on 2025 report significantly higher spending intentions. In contrast, those with a neutral or negative outlook anticipate reducing their spending.
We’re in for some interesting times. We’ll continue to track sentiment in discretionary spending as one of many factors that may influence the overall marketplace in 2025 so stay tuned.
