Trump Takes Credit For Consumer Confidence Boost
The Consumer Confidence Index from the Conference Board was released yesterday for the month of Dec and it came out at 113.7, better than the expected 109.8. Not long after, our President-elect took to his favorite communication device and tweeted thanks to himself. Yes, it is a bit of a dickish thing to do for sure, though he is probably right.
There are two confidence indicators for the U.S. economy released each month, the one cited above, and the University of Michigan Consumer Sentiment Index. The U. Michigan index is released twice each month, with the second release at the end of the month being a revision to the earlier release. Both indicators are watched by market participants, though have not recently been big market movers. Economists and market players have come to learn both indexes are highly correlated with the quality of headlines in newspapers and on news web pages. To the extent the media is pushing positive economic developments, the indexes do better, to the extent the media is pushing negative news, the indexes are worse.
It should not be a surprise both indexes have shown improvement since the election. Prior to the election the media was pushing doom and gloom if Trump won, and business as usual if Hillary won; no need for consumers to get excited. Since the election in November, the opposite has happened. The business world is excited about Trump growth, Trump has already caused CEO’s to rethink taking jobs out of the U.S. and instead create more here, and the media is trumpeting these early rhetorical successes. Moreover, Trump has put together a cabinet largely made up of competent private sector players that has instilled a sense of excitement in the observant American. The media has conveyed these successes to their readers, listeners, and viewers.
There is reason to believe the future will be brighter, and the headlines in the media are pushing that narrative. It is revealed in better confidence data.