The divides don't run across the demographic divide. A recent survey by The Economist and YouGov discovered that more than 58 percent of Americans believe that we're in a recession right now. Men tend to be slightly more likely than women to think we're in a recession at 59 percent versus 57. A majority of 51 percent people of African descent believe we're in recession, while 27 percent saying that we're not, and 22 percent stating they're not sure. For Hispanics, 53 percent of them say there's a recession in the country, and 22 percent affirm that we're not, and 25 percent aren't sure.
Whites tend to be more likely to say that we're in a recession. Sixty-five percent percent of white males who have no college degrees believe we're in recession, and 60% of women who do not have a college degree believe they're experiencing recession. Sixty percent of white males with a college education believe they're experiencing a recession. 56 percent of college educated white women are in agreement.
The main reason we are divided is on the subject of politics. Only 38 percent Biden voters believe that we're currently in recession, but that's a different story for 82 percent of Trump voters. 44 percent of registered Democrats claim that we are experiencing a downturn, which is compared to 75 percent of Republicans. In other words, America's political tribes don't simply disagree over policy but even over reality.
The gap could be due to different opinions about what is considered recession. Fifty-two percent of Trump voters and 50 percent of registered Republicans think that the cost of items or services provide the most reliable indicator of the severity of a recession. Only 34 percent of Biden supporters and 33 percent of Democrats agree with this view. Surprisingly, Biden voters are much more likely to highlight the stock market as their most reliable indicator as compared to Trump voters, with 9 percent.
The elements that economists consider to be recession indicators have lower support than the prices measure. Only 23 percent of the population thinks that asking what percentage of the population is expanding or shrinking is the most accurate indicator, comprising 24 percent of Democrats as well as 25 percent of Republicans. Only 16 percent of Democrats are influenced by jobs reports and the unemployment rate, vs. 7 percent of Republicans. This could be a sign of a bipartisan consensus that the majority of people agree that they don't consider a recession like economists do.
When it comes to jobs reports, we'll be receiving an update from the Department of Labor's job openings report and labor turnover report for the month of July. Although that may appear to be the past, it could be interesting to determine whether the huge hiring surge in July — 528,000 new workers added to payrolls — was accompanied by an increase in openings, or if the hiring filled in earlier open positions. Wall Street's economists believe the number of openings could decrease to 10.4 million, down from 10.7 million. If the number of openings fall to the other direction it could trigger concerns that the Fed is likely to have to raise rates faster to dampen the market for jobs.
Similar dynamics likely is true of Friday's job report. Economic analysts anticipate 300,000 new jobs to be created during the month which includes 290,000 private sector jobs being hired. The average hourly wage is projected to increase by 0.4 percent, slowing to 0.5 percent. In terms of unemployment, it is expected to remain in the range of 3.5 percent. Any major “beat” on these figures suggesting more jobs, better wages, or even lower unemployment is likely to trigger some kind of panic over future rate increase in September, and the direction of rates thereafter. The market has concluded that the hiring in July was the peak of tightness in the labor market, just like June was the month of peak inflation. The market now anticipates the trend to continue cooling. If things turn the other direction, it could be a tough day for the market.
