US Consumer Confidence at 12 Year Highs
Consumer confidence jumped to the highest level since Y 2004, extending Americans’ optimism for their finances and the US economy following Donald Trump’s Presidential election victory.
The University of Michigan said Friday that its MSI (final index of sentiment) rose to 98.2 from 93.8 in November. The median projection in a survey called for 98, equal to the preliminary reading released earlier this month. Inflation expectations for the next 5 to 10 years fell to a record low.
A record share of respondents “spontaneously mentioned” the expected impact of Donald Trump’s policies, more than 2X the number when Ronald Reagan took office in Y 1981, according to the report.
While President Elect Trump’s promises of tax cuts and job gains have helped drive increases in consumer confidence.
“Such favorable expectations could help jump-start growth before the actual enactment of policy changes as well as form a higher performance standard that will be used to judge the Trump Presidency,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement.
Over the next 5 to 10 years, respondents project a 2.3% rate of price growth, down from 2.6% in the prior month. Such low inflation expectations helped offset “meager” projected gains in wages.
One caveat in the data: even with expected gains in the economy and personal finances, respondents did not become more positive toward buying homes and vehicles amid higher borrowing costs, according to the report.
Respondents expected the inflation rate in the next year will be 2.2%, the lowest since September 2010. That compared with 2.3% in the December preliminary survey and 2.4% in the November survey.
Merry Christmas, Happy Hanukkah and Good Wished for Success in Y 2017.