Consumer Confidence Highest Since Before Great Recession
1. Consumer Confidence Soars to Highest Since 2008
2. My Theory on Why Consumer Confidence is Rising Rapidly
3. Optimism on Economy Surges Since Trump Election
4. More Americans Are Optimistic About Their Investments
5. The Knock on Trump’s Plan For Income Tax Reform
To coin an old phrase, the country has “gone ape” in the wake of Donald Trump’s surprise election as the 45th President of the United States. The stock markets have skyrocketed to new record highs day after day. Consumer confidence has soared to the highest level since 2008.
For reasons that are not entirely clear, Americans are becoming much more optimistic about the economy for 2017 and beyond. Among Republicans, optimism about the economy has more than quintupled since before the election. Among Independents, optimism has more than doubled since October.
This newfound optimism is not shared across the board, of course. Democrats have seen their economic optimism diminish by more than half since the election as we’ll see below. Despite that, most economic forecasts are on the rise of late. Those are our main topics today.
Consumer Confidence Soars to Highest Since 2008
The US Consumer Confidence Index has been soaring since the end of the Great Recession, and it hit another recent new high last month. The Conference Board reported Friday that its Consumer Confidence Index rose to a surprising 107.1 in November, versus the pre-report consensus of 101.1, the highest reading since 2008 (see chart below).
Here’s an excerpt from the Conference Board’s press release last Friday:
“Consumer confidence improved in November after a moderate decline in October, and is once again at pre-recession levels. A more favorable assessment of current conditions
coupled with a more optimistic short-term outlook helped boost confidence… With the holiday season upon us, a more confident consumer should be welcome news for retailers.”
Whether you voted for Donald Trump or not, and whether you support him or not, a growing number of Americans are becoming confident that his proposed policies of lower income taxes for individuals and corporations, reduced regulations and renegotiated trade deals will be very positive for the US economy.
Consumer spending accounts for almost 70% of US Gross Domestic Product, and the Consumer Confidence Index (CCI) is our best indicator of consumers’ willingness to open their wallets and stimulate the economy. Based on the latest reading in the CCI, we would expect a significant boost in consumer spending this holiday season. That remains to be seen, of course.