The Conference Board, a nonprofit business organization that tracks economic indicators, revealed Tuesday that its Consumer Confidence Index has risen to 113.7, the highest in 15 years.
The index is up from 109.4 in November and is only 0.3 points short of the August 2001 mark of 114.
Regarding why the American people’s confidence in the economy had suddenly climbed to such a high level, President-elect Donald Trump believed he had a reasonable theory.
“The U.S. Consumer Confidence Index for December surged nearly four points to 113.7, THE HIGHEST LEVEL IN MORE THAN 15 YEARS!” he tweeted Tuesday evening.
“Thanks Donald!” he added, the premise being that his election to the White House had spurred this renewed confidence.
The U.S. Consumer Confidence Index for December surged nearly four points to 113.7, THE HIGHEST LEVEL IN MORE THAN 15 YEARS! Thanks Donald!
— Donald J. Trump (@realDonaldTrump) December 28, 2016
According to the Conference Board, he is right.
“Consumer Confidence improved further in December, due solely to increasing Expectations which hit a 13-year high,” Lynn Franco, director of economic indicators for the Conference Board, said in a statement.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,” Franco said. “Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
The unexpected rise in consumer confidence was therefore being driven by high expectations for the president-elect, whose polices and proposals many hope will spur economic revitalization.
Amherst Pierpont Securities chief economist Stephen Stanley reportedly concurred with this assessment.
“The election of Donald Trump has raised household expectations for the economy to a very high level,” he wrote in a research note. “It remains to be seen whether Trump can deliver.”
So long as Trump fulfills his campaign pledges to repeal job-killing regulations and lower the corporate income tax rate, among other things, he will most likely deliver, predicts Mark Hendrickson, an adjunct faculty member, economist and fellow for economic and social policy with The Center for Vision & Values at Grove City College in Pennsylvania.
“The potential for a powerful economic boom is enormous,” he wrote late last month on Conservative Review.
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