Consumer Sentiment at 12-Year High After Trump Win

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(Newswire.net — December 24, 2016) —The University of Michigan announced on Friday 23rd December that its final index of consumer sentiment rose to 98.2 points from November’s 93.8 points, reports Bloomberg.

Also, inflation expectations for the next five to ten years, fell to a record low.

According to Surveys of Consumers chief economist, Richard Curtin, respondents projected a rate of increase in prices of 2.3 percent for the next five to ten years, as opposed to 2.6 percent from the previous month.

A record number of participants participated in the survey, more than double the number then when Ronald Reagan took office in 1981. They spontaneously mentioned that they expected an impact from Donald Trump’s future policies, reports the University of Michigan.

The current conditions index, which measures Americans’ perceptions of their personal finances, increased to 111.9 in December, which is the highest since 2005 and rising from 107.3 in November. The preliminary reading was 112.1.

The gauge of expectations for six months from now rose to 89.5, the highest since January 2015, from 85.2 a month earlier, comparing to a preliminary figure of 88.9.

Consumers were confident about an increasing number of jobs but less optimistic about rising wages, Business Insider reports. Also, according to the last month’s survey, the only two groups that weren’t more confident were those with a college degree and residents of the Northeast.

Trump’s promises to cut taxes and drive unemployment levels down clearly contributed to this increase in consumer confidence.

Bloomberg agency notes that the “honeymoon” period might be over in the coming months, unless the economic situation fails to show any signs of improvement.

Richard Curtin said in a statement that 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 evaluate the effectiveness of Trump’s presidency.