The final consumer sentiment reading from the University of Michigan for 2016 came in just below a 13-year high.
And it’s all about Donald Trump.
Consumer sentiment hit a 98.2 in December according to the UMich survey, the highest since January 2004.
“While the surge in confidence following Trump’s surprise election ended by mid December, it nonetheless led to the highest level of the Sentiment Index since January 2004,” said Richard Curtin, chief economist for the survey.
“An all-time record number of consumers (18%) spontaneously mentioned the expected favorable impact of Trump’s policies on the economy,” Curtin added. “This was twice as high as the prior peak (9%) recorded in 1981 when Reagan took office.”
Along with The Conference Board’s consumer confidence report — due out next week for the final time this year — and business surveys like the regional Federal Reserve reports and the NFIB’s small business optimism gauge, survey-based readings on the US economy have shown a general upswing since Trump’s election.
Initial jumps in these measures were, in part, attributed to some consumer relief that the election was over. Others were based on the view that potentially fewer regulations under a Trump administration would be good for business.
And while the overall numbers have made the post-Trump period appear like quite a honeymoon for the US economy, not all respondents, of course, are excited about what the next four years could bring.
“To be sure, nearly as many consumers referred unfavorably to anticipated changes in economic policies, but those references were less than half as frequent as the peak level recorded just three years ago (16% vs. 37%),” Curtin said.
Moreover, the view that both consumers and markets have of “Trumponomics” being good for the US economy is still mostly based in ideas and beliefs, not solid proposals.
“Needless to say, the overall gain in confidence was based on anticipated policy changes, with specific details as yet unknown,” Curtin said.
“Such favorable expectations could help jump-start growth before the actual enactment of policy changes, and form higher performance standards that will be used to judge the Trump presidency.”