Michigan Ross Professor Sarah Miller Discusses How News Consumption May Affect Economic Sentiments

Wages are up, unemployment is low, spending is high, and inflation is slowing. But voters still feel overwhelmingly negative about the economy, and a wide majority of them disapprove of President Joe Biden’s handling of the current economic situation. Even more surprisingly, voters are far more negative about the economy in general than they are about their own personal economic situation. These apparent contradictions have resulted in much puzzling from journalists and hand-wringing from democratic political analysts and have led many to wonder about the source of individuals’ beliefs and information regarding overall economic conditions.

New data from the Michigan Ross-FT poll sheds light on these questions. This recent poll shows that voters aged 18-44 list social media applications like TikTok, Instagram, and Facebook as their go-to source for news about the economy, with 73% of this demographic ranking it as a frequent source for economic news. This is higher than other possible sources of information such as television news (63%), conversations with friends and family (58%), or online or print news articles (55%). Notably, this age group is also more negative on the economy and Biden than older voters aged 45-64 and 65+ who rely less on social media sources, instead favoring traditional outlets for news about the economy.

Using informal sources of information about the economy could help these younger voters tune in to relevant measures of financial precarity and concern that are missed by standard macroeconomic data. If this is the case, users of these sites may, in fact, be better informed about conditions on the ground. At the same time, many fear that social media sites — where algorithms prioritize “viral” content — may be a source of misinformation and at the heart of the disconnect between voter sentiment and economic data.