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Americans from all corners of the economy are loving life since Trump's election
by Bob Bryan | December 08, 2016


Americans from all corners of the economy seem to be enjoying the conditions a lot more since the election of Donald Trump.

Nearly every measure of consumer, business, or executive confidence has gained in the month since the election, according to Michelle Meyer, chief US economist at Bank of America Merrill Lynch.

"The data clearly show that consumers, investors, and business CEOs have all become more optimistic since the election," Meyer wrote in a note to clients on Thursday.

Things such as regional manufacturing indexes, consumer confidence surveys, and investor sentiment have ticked up since November 8. The only survey that has slid is the ISM-adjusted Empire Manufacturing Survey, which measures the confidence of manufacturers in New York state.

"Bottom line: Most business activity surveys point to greater confidence following the election," Meyer wrote.

The biggest confidence boost has come from consumers, according to Meyer, with both the Conference Board and Investor's Business Daily/TechnoMetrica Market Intelligence indexes hitting postrecession highs.

Investors and CEOs have seen jumps but are still not overflowing with confidence, according to the note.

"However, investor and CEO confidence are still subdued, with the former only modestly above its average since 2010 (52.9) and the latter much below (84.1)," Meyer wrote.


This sort of upswing in confidence usually starts to show up outside of surveys and in real data in a short amount of time, according to Meyer's analysis. The increases in business indexes usually point to an increase in capital expenditures, while the consumer confidence indicators can predict consumer spending.


Some of the correlations are weaker than others, Meyer said, but directionally they point to higher output for the US economy.

"Overall, we see a significant relationship between surveys and actual output, but we would be careful given lags and historical episodes with misleading signals," Meyer wrote.

While it is unclear if the survey improvements are specifically due to Trump's election or simply due to the election uncertainty being over, it is a great sign for the US economy.

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