Despite the mainstream media pushing the portrayal of a White House in disarray, the economy doesn’t appear to be worried about it in the slightest.
As anyone who has checked their IRA balance since Election Day knows, the stock market has been on a record tear. Not only has the market been setting records in terms of closing at record highs, it’s setting records at the number of consecutive days it’s closing at record highs! Last week when the markets closed on a record high Thursday, the Wall Street Journal confirmed that it was the longest streak of record closes in twenty years.
U.S. markets since election. pic.twitter.com/L0pMORkDOD
— Fox News (@FoxNews) October 14, 2017
Much of the rise in the market has been due to anticipation of the enactment of Trump’s economic agenda (as evidence by stocks trading at higher valuations than their historical average, as measured by the price to earnings ratio). Tax reform boosts the bottom line without increasing a company’s top line, which is a benefit for stocks, as is a reduced regulatory environment, which the administration has already taken historic steps to creating.
Granted, given that a disproportionate number of stocks are held by the wealthy, one could argue that the market’s boom isn’t helping the “real” economy, but the data suggests otherwise.
According to Bloomberg, U.S. consumer sentiment unexpectedly surged to a 13-year high as Americans’ perceptions of the economy and their own finances rebounded following several major hurricanes, a University of Michigan survey showed Friday. The jump in sentiment, which was greater than any analyst had projected, may reflect several trends: falling gasoline prices following a hurricane-related spike; repeated record highs for the stock market; a 16-year low in unemployment; and post-storm recovery efforts driving a rebound in economic growth.
The advance in the main gauge spanned age and income subgroups as well as partisan views, according to the report. Almost six out of every 10 consumers thought the economy had recently improved in early October, the university said.
Some of the highlights:
> The sentiment index rose to 101.1 (est. 95), highest since Jan. 2004, from 95.1 in Sept.
> The current conditions gauge, which measures Americans’ perceptions of their finances, jumped to 116.4, highest since Nov. 2000, from 111.7
> The survey’s expectations measure increased to 91.3, highest since Jan. 2004, from 84.4
The consumer sentiment index (also referred to as the consumer confidence index) offers some predictive power in that consumers are more likely to spend more when it’s high, and spend less when it’s low. The index measures how households predict business conditions over the next six months to be, their feelings about their current employment conditions and conditions over the next six months, and their expected family income over the next six months.
Good news indeed.
[Note: This post was written by Matt Palumbo. He is a co-author of the new book A Paradoxical Alliance: Islam and the Left, and can be found on Twitter @MattPalumbo12]