Food Prices Shape Economic Views, But Partisanship and Media Negativity May Play Larger Roles

Food prices are very visible and central to people's perceptions of the economy, yet they make up a small part of most budgets and inflation indexes.

Two theories seek to explain why economic sentiment lags improving fundamentals (1) people are still adjusting to higher prices, or (2) partisanship and media shape perceptions more than actual prices.

Political partisanship strongly colors economic views, with Republicans 2.5x more negative under Democratic presidents. Even Democrats have grown more negative.

Media economic coverage has been increasingly negative since 2017, far exceeding the negativity warranted by economic realities. This may shape perceptions.

Advertising has become more invasive across screens and devices, eroding trust in content and exacerbating consumer fatigue.