Partisan divide deepens as Republicans and Democrats clash over 2025 economic predictions

(TNND) — Americans head into 2025 with some positive, though conflicted, economic predictions and widely held expectations that we’re in for a year of political conflicts.

And strong partisan differences run beneath the overall results.

Gallup surveys that were conducted earlier this month and published Monday show majorities expect gains in the stock market, increasing or full employment, and reasonable price growth.

But 56% also said they expect a year of economic difficulty.

Colorado State University economist Stephan Weiler said those positive aspects of the economy many Americans are predicting for the coming year are already a reality.

The Dow Jones Industrial Average was up more than 13% in the last year, as of Monday afternoon.

The labor market remains strong, even if it is trending weaker. The economy added 2.27 million jobs over the previous 12 months, as of the latest labor report.

Progress against inflation has stalled, but its current annual rate of 2.7% is much closer to the Federal Reserve’s 2% target than its 9.1% peak back in June 2022.

Weiler said he blames “uncertainty” for the reason why most Americans in the Gallup survey said they expect a year of economic difficulty.

“I have a difficult time pointing at anything else,” he said.

Weiler said Americans still suffer from a “pandemic hangover,” which he said is chiefly “because it shook people in their certainty.”

“People who foresee sort of darker clouds are also likely to be more vulnerable,” he said. “Part of being vulnerable is being uncertain and not having a really good fallback position.”

The U.S. economy is doing fine by all the broad measures, such as employment, inflation, and growth.

Goldman Sachs researchers even expect our economy to beat expectations next year.

But there’s a “distribution” problem, Weiler said.

Wage growth on the whole is about 4% right now, which is outpacing the 2.7% inflation.

But with any average, there are folks doing much better and folks who are doing much worse.

The worst of inflation is behind us, but prices are still higher than they were several years ago.

And deflation, prices falling back to their previous levels, is almost certainly not going to happen, Weiler said.

Credit card delinquencies are the highest they’ve been in over 10 years, Weiler said.

And while the unemployment rate is a relatively low 4.2%, it has been creeping up. And we’re seeing the highest level of long-term unemployed Americans in seven years, he said.

“And this is where also politics inevitably crosses over with economics,” Weiler said.

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The Gallup poll also showed sharp partisan divides in how Americans view the economy.

Nearly 90% of Republicans think the stock market will rise in the coming year. Just 46% of Democrats share that outlook.

Similarly, 87% of Republicans think prices will rise at a reasonable rate. Just 23% of Democrats said the same.

Eighty-six percent of Republicans expect increasing or full employment in 2025. Just a quarter of Democrats said the same.

Gallup found 78% of Republicans forecast economic prosperity. Just 15% of Democrats do, as well.

“A lot of Republicans think things are going to go well, which is unsurprising, because the folks they elected won,” said Peter Loge, the director of the School of Media and Public Affairs at George Washington University. “A lot of Democrats think they're going to go poorly, which is unsurprising.”

Overall, 76% of those surveyed by Gallup said they expect a year of political conflict.

Are they right?

“Yes, there will be a lot of political conflict,” Loge said. “The Republicans have the slimmest of possible majorities in the House. And that majority is already raucous. You're already seeing political conflict within the administration, and the administration doesn't even take power for another three weeks. This could be a bumpy political year.”

President-elect Donald Trump will take office with unified government.

But Republicans will convene the new Congress on Friday with a 220-215 seat advantage. And Republicans will have just a 53-47 edge in the Senate.

“Voters mostly gave the Republicans a mandate to fix things, however ill-defined that is. And fixing things means make it less hard for me to pay the bills, make it less stressful, make the world seem less confusing and less daunting. And exactly how that becomes policy is up in the air,” Loge said. “And there are going to be sharp debates about what that means for policy.”

Partisanship has become a defining feature of American politics, Loge said.

That’s seen in the Gallup responses on the economy, along with other issues.

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For example, Republicans voted for a candidate who said he would increase U.S. power in the world, Loge said.

Unsurprisingly, 90% of Republicans think that the U.S. will increase its power in the world now that Trump is entering the White House.

And, Loge said, unsurprisingly only 19% of Democrats feel the same.

Majorities of Republicans foresee positive outcomes for the U.S. on all but one of its 13 survey questions, Gallup said.

No more than a quarter of Democrats expressed a positive outlook on 11 of the 13 questions.

And Republicans’ positive predictions are 30 to 79 percentage points higher than they were two years ago, while Democrats’ positive predictions are between five and 59 points lower.