As inflation keeps rising, investor sentiments are nearing their lowest since the COVID-19 pandemic’s start. Recent polling from Gallup shows investor optimism is down as economic outlooks continue to worsen as the Biden Presidency’s first year comes to a close.
A survey of investors conducted from Nov. 1-7 shows the overall optimism index has fallen to 10. The index hit 4 at the pandemic’s lowest point in late 2020. Pre-pandemic, the index’s lowest point was at 9 in the Obama Administration’s final years. Investor sentiment was at its highest point since 2000 at the onset of the pandemic, but quickly fell. As this year has worn on, investor confidence has taken a sharp hit with the Biden Administration’s failures to handle crises and make meaningful policy gains.
Driving the fall in investor confidence are growing concerns about economic growth, unemployment, and inflation. Net optimism – which takes the percent of optimism minus the percent of pessimism to reach the score – has taken a large hit. Optimism about inflation is by far the lowest, with -60% optimism overall on the issue. Similarly, optimism around economic growth and the unemployment rate are at the lowest point since the pandemic’s start. The lone score that remains above water is optimism about the stock market, which has remained between +20% to +25% since the fourth quarter of 2020.
Overall, the lack of investor confidence speaks to the sentiment of the public at large, and those polled are representative of more informed voters on both sides. Moving into the 2022 midterms and a winter where supply chain shortages and lack of meaningful economic progress are likely to continue under the Biden Administration, Republicans have an opportunity to campaign on the stark contrast between the work of the Biden Administration and the merits of the economy that we had before the pandemic. GOP candidates can present themselves as the economically competent leaders that Americans want at the helm to push forward out of the pandemic economy.
