Read our November 20th report: Stock Ownership and Stock Price Expectations

Consumer sentiment fell in early November as consumers judged future economic prospects less favorably, while their assessments of current economic conditions remained largely unchanged. The outcome of the presidential election as well as the resurgence in covid infections and deaths were responsible for the early November decline. Interviews conducted following the election recorded a substantial negative shift in the Expectations Index among Republicans, but recorded no gain among Democrats. It is likely that Democrats' fears about the covid resurgence offset gains in economic expectations: 59% of Democrats reported that their normal life had changed to a great extent due to the coronavirus compared with just 34% among Republicans. The gap in expectations closed somewhat due to the coronavirus and the partisan shift in expectations that began well before the election. Note that Republicans now voice the least favorable economic expectations since Trump took office, and Democrats have voiced more positive expectations (see the chart). In the months ahead, the partisan gap is likely to enlarge, although the gains will be limited until a potential vaccine is approved and widely distributed.