You won’t hear very much about this in newspapers like The Washington Post, the New York Times or even the Wall Street Journal. That’s because the Trump presidency likely has something to do with it. And far be it for the so-called mainstream media to attribute anything good to Trump. So just what’s going on here?
According to Bloomberg, the Consumer Comfort data released earlier this month shows Americans registered the highest level of optimism of the past 16 years. This is yet another sign that the economy is expanding, generating enthusiasm and showing growth.
A new index reading is produced every week, making it a timely sentiment gauge, and unlike the other statistics, it determines only current conditions with no questions about expectations. Also, in the United States, evidence shows the measure is a lagging indicator of the stock market’s performance. An article published by Bloomberg this past week cites key takeaways:
Consumers had reason to feel upbeat last week with stocks again reaching all-time highs and as Friday’s [August 3rd] report on July employment confirmed the strong labor market remains intact. Record-high job vacancies help explain why lower-income Americans and the unemployed are more positive about their prospects. The latter group hasn’t been this optimistic since before the last recession. While the robust job market is offsetting the disappointment tied to lack of progress in Washington on health care and tax reform, geopolitical tensions related to North Korea represent a risk to consumer optimism.
The Bloomberg report measures perceptions of the American people based upon three critical variables: the state of the economy, personal finances and whether it’s a good time to buy goods or services. The data’s history goes back to 1985, and before Bloomberg secured licensing the rights in 2011, Langer Research Associates in New York produced the survey, originally known as “The ABC News Consumer Comfort Index.”
Here’s how it works: Weekly telephone interviews with a random sample of about 250 people aged 18 or over take part in the survey based on a four-week moving average of 1,000 responses. The answers are broken down by participants’ sex, age, income level, race, region of residence, political affiliation, marital and employment status. This gives a more detailed picture of what is driving changes in consumer confidence. The difference between the percentage of results with negative views and those with positive outlooks is divided by three. The range of the outcomes is between 100 depicting encouraging reactions and a minus 100 signaling all participants had adverse replies to all three components.
Highlights from the Comfort Index for the first week in August show the trend continuing:
- Overall measure jumped to 51.4, highest since week ended Aug. 19, 2001, from 49.6
- Level of current views on the economy rose to 51, also a 16-year high, from 48.6
- Personal finance increased to an eight-week high of 58.9, up from 58
- Gauge of buying climate climbed to 44.3, best since week ended June 11, from 42.2
The survey also shows encouraging outcomes in sentiments of the unemployed which is the best in a decade. As well those making less than $50,000 per year are the most positive numbers since 2010. Renters are also showing an increase in contentment with strongest results in that category since May of 2007.
Any way you spin it – these are darn good numbers. And it’s a shame more news outlets don’t publish this information to encourage even further optimism among Americans. Amid numerous issues that are causing Americans to continue to be cautious, it is comforting (pun intended) to know that at long last a sense of consumer confidence in the U. S. is on the upswing.