Consumer confidence has risen to the highest level in nearly a decade, a psychological indicator that Americans have high hopes for Trump’s presidency. As reported by the Conference Board on Tuesday, the confidence index jumped from 98.6 in October to 107.1 in October.
Most survey results were gathered before the election, but as Conference Board economist Lynn Franco explains, “It appears from the small sample of post-election responses that consumers’ optimism was not impacted by the outcome.”
We haven’t seen numbers like this since July 2007, and the fact that consumers were unbothered by Trump’s victory suggests that America does not believe his administration will harm the economy.
The survey, which measures confidence towards business conditions, jobs, and personal finances, also suggests that Americans have an optimistic outlook regarding the next six months.
“The election result has had a clear positive impact on sentiment,” writes Capital Economics’ Andrew Hunter. “It also supports our view that consumer spending will continue to rise at a decent pace over the rest of the year.”
Consumer spending drives economic growth, which is why the Conference Board monitors things like “consumer confidence.” In fact, this spending accounts for nearly 70% of US economic output.
Americans are not wrong to put their faith in the economy. According to government data, the economy grew at a 3.2% annual rate from July to September – the fastest pace we’ve seen in two years. Consumer spending increased at a 2.8% annual rate during the third quarter, squashing estimates of 2.1%, and the unemployment rate has dropped to 4.9% – a figure considered by economists to be “full employment.”
Stock Market Rally
Wall Street has also benefitted from Trump’s victory, with the S&P 500, the Dow, and the Nasdaq reaching all-time highs this week.
Far from rumors that the stock market would crash should the real estate mogul win the White House, investors are now hoping that Trump “will unleash the US economy by cutting taxes, rolling back regulation, and ramping up infrastructure spending,” reports CNN Money.
“The basis for the rally is optimism about reversing Obama-nomics – raising taxes and increasing regulation,” explains market analyst Peter Boockvar.
Editor’s note: Despite the protests and whining from Clinton supporters, America is actually a lot more confident now that Trump is President-elect. Perhaps we are realizing how bad Obama has been.