A tale of two economic surveys

From the pages of In Business magazine.

Wisconsin business leaders acknowledge the economic pain brought by President Trump’s tariffs — pain felt most acutely by farmers — yet in a mostly upbeat Wisconsin Manufacturers & Commerce economic survey, a majority of them support the tariffs. Meanwhile, a survey from Madison-based CUNA Mutual Group detected growing middle-class anxiety.

What to make of them? Different survey samples produce different results. WMC found that 67 percent of business operators either strongly or “somewhat” support tariffs imposed on China, even while 47 percent admitted they are having a negative effect on business.

In contrast, CUNA found that its survey respondents, U.S. adults ages 18 or older who make between $35,000 and $100,000, are increasingly pessimistic about their ability to achieve the “American Dream,” and women and families with children feel it the most. CUNA Mutual also discovered that middle-class Americans are less optimistic about their ability to achieve upward mobility than they were six months ago.

In the WMC survey, where support for tariffs on Chinese goods augments the conviction that something has to be done to stop China’s unfair trade practices, President Trump has the trust of most businessmen and women on economic issues. When the U.S. opens its markets to foreign competition, there is the expectation of reciprocal treatment, and the general sentiment is that “something drastic needs to be done to force a change,” notes WMC President and CEO Kurt Bauer.

In short, business operators cut Trump some slack, but consumers are another matter. The CUNA data shows that consumers think the odds of a near-term recession are pretty high as the long economic recovery comes to an end. Remember, it started 10 years ago and even though it has never featured the consistently impressive quarterly growth of past expansions — GDP for the second quarter was a mediocre 2.1 percent — it’s still alive and kicking.

But recoveries don’t maintain their kick forever. Whether you believe the 2017 tax reform measure was ill-timed or just in the nick of time, we can’t be sure the ebbs and flows of the business cycle have been conquered, and more than one forecaster expects at least a mild downturn in the next couple of years. A win-win trade deal with China would provide the stimulus needed to prolong the recovery, but the president appears to enjoy playing the tariff card, and China appears willing to wait him out.

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