Consumer Sentiment Continues to Surge in Response to Trump Win

The Survey of Consumers, a closely-watched gauge of consumer sentiment from the University of Michigan, came in at 98 in December, up from 93.8. The initial reading immediately after President-elect Donald J. Trump won the presidential election was a surge in confidence, a sentiment that continues several weeks after.

“Consumer confidence surged in early December to just one-tenth of an Index point below the 2015 peak—which was the highest level since the start of 2004,” Surveys of Consumers chief economist, Richard Curtin said. “The surge was largely due to consumers’ initial reactions to Trump’s surprise victory.”

When asked what news they had heard of recent economic developments, more consumers spontaneously mentioned the expected positive impact of new economic policies than ever before recorded in the long history of the surveys.

“To be sure, an equal number volunteered negative judgments about prospective economic policies, but the frequency of those negative references was less than half its prior peak levels whereas positive references were about twice its prior peak,” Mr. Curtain added.  The most important implication of the increase in optimism is that it has raised expectations for the performance of the economy.”

The results easily beat the median economic forecast, as economists were anticipating the reading to rise to only 94.5.