More consumers than ever before are bullish on the US economy after President-elect Donald Trump’s surprise win, according to the University of Michigan.
The semimonthly consumer-sentiment index released Friday unexpectedly spiked. The preliminary reading for December hit 98, the highest since January 2015. Economists had forecast that it improved to 94.5 from 93.8, according to Bloomberg.
Consumer confidence rose immediately after the election, and the UMich survey had cautioned that it may have been exaggerated by a sense of relief that the election was over.
But this new survey showed that people were more direct about why they turned more bullish.
“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,” said Richard Curtin, the survey’s chief economist. The only groups of people that weren’t more confident were those with a college degree and residents of the Northeast, according to the survey.
Curtin said an equal number of people were worried about possible forthcoming economic policies, but the frequency of positive references was about twice its prior peak. Separate polls by Gallup and the Pew Research Center showed that the improved outlook was split along party lines: Republicans suddenly became more optimistic, while Democrats became more downbeat after Trump won.
This was in line with other surveys of confidence among consumers, investors, and CEOs that improved after the election.
“The most important implication of the increase in optimism is that it has raised expectations for the performance of the economy,” Curtin said. “President-elect Trump must provide early evidence of positive economic growth as well as act to keep positive consumer expectations aligned with performance.”