Donald Trump has US consumer confidence near a 13-year high by Myles Udland |
December 26, 2016
The final consumer sentiment
reading from the University of Michigan for 2016 came in
just below a 13-year high.
And it’s all about Donald Trump.
Consumer sentiment hit a 98.2 in December
according to the UMich survey, the highest since January
“While the surge in confidence following
Trump’s surprise election ended by mid December, it nonetheless
led to the highest level of the Sentiment Index since January
2004,” said Richard Curtin, chief economist for the survey.
“An all-time record number of consumers
(18%) spontaneously mentioned the expected favorable impact
of Trump’s policies on the economy,” Curtin added. “This
was twice as high as the prior peak (9%) recorded in 1981
when Reagan took office.”
Along with The Conference Board’s consumer
confidence report — due out next week for the final time
this year — and business surveys like the regional Federal
Reserve reports and the NFIB’s small business optimism gauge,
survey-based readings on the US economy have shown a general
upswing since Trump’s election.
Initial jumps in these measures were, in
part, attributed to some consumer relief that the election
was over. Others were based on the view that potentially
fewer regulations under a Trump administration would be
good for business.
And while the overall numbers have made
the post-Trump period appear like quite a honeymoon for
the US economy, not all respondents, of course, are excited
about what the next four years could bring.
“To be sure, nearly as many consumers referred
unfavorably to anticipated changes in economic policies,
but those references were less than half as frequent as
the peak level recorded just three years ago (16% vs. 37%),”
Moreover, the view that both consumers and
markets have of “Trumponomics” being good for the US economy
is still mostly based in ideas and beliefs, not solid proposals.
“Needless to say, the overall gain in confidence
was based on anticipated policy changes, with specific details
as yet unknown,” Curtin said.
“Such favorable expectations could help
jump-start growth before the actual enactment of policy
changes, and form higher performance standards that will
be used to judge the Trump presidency.