We have numerous gauges of consumer and business confidence, and virtually all of them are surging higher this year – many are at all-time highs. This is despite the fact that President Trump is reviled by the left (and some on the right) and has approval ratings that are in the dumps.
Today, I’ll start by highlighting the major confidence indexes which are soaring, and then I’ll circle back to some possible reasons why. Despite the president’s low approval ratings, confidence among Americans is exploding. It should make for an interesting blog post.
- The Conference Board’s Consumer Confidence Index – perhaps the most widely-followed indicator — dipped in September to 119.8, but was still up 20% from its 2016 average. As you can see in the chart below, the Consumer Confidence Index has advanced strongly since the end of the Great Recession in 2009.
- The Small Business Optimism Index shown above has averaged 104.9 through August, according to the National Federation of Independent Business. That’s up nearly 12% from the year before. More than a quarter of small businesses say the next three months will be a “good time to expand,” compared with just 9% that said so a year ago.
- The University of Michigan’s Consumer Sentiment Index has averaged 96.2 so far this year, compared with 91.4 over the same time period last year. In fact, you have to go back to 2004 to find another nine-month stretch where the Index was in the mid-to-high 90s.
- In September, the IBD/TIPP Economic Optimism Index marked its 12th straight month in positive territory, the first time that’s happened in 12 years. The Index stood at 53.4 in September. Last year it averaged 48.6. Any reading above 50 indicates the economy is expanding.
- The National Association of Manufacturers reports that for the first three quarters of this year, an average of 90.9% of manufacturers said they were positive about their own company’s outlook, the highest three-quarter reading in the survey’s 20-year history. By contrast, just 59.8% of manufacturers had a positive outlook in the first three quarters of last year.
- Gallup’s Investor Optimism Index hit a 17-year high in September. And Gallup’s weekly Economic Confidence Index has been in positive territory since November 2016, after being in negative territory for all but a handful of weeks since 2008.
And speaking of investor optimism, we should also add the stock markets to our list of positive indicators. The stock markets, after all, are one of the best optimism indexes out there, since people are voting with their own money. The US stock markets have been hitting record high after record high all year.
The Dow Jones Industrial Average closed yesterday at 22,873, another record high. That’s up over 14% for the year, and almost 25% compared with a year ago. The S&P 500 Index closed yesterday at 2,555, up almost 15% this year, following a gain of almost 12% in 2016. US stocks have risen by over $5.2 trillion in value since the election.
Dow Jones Industrial Average
It is important to note that all these indexes started to trend higher after the election in November last year. I’ve said this before and I still believe that confidence has soared because many Americans welcomed President Trump’s pro-business, pro-growth policies and his promise to cut regulations
The problem, unfortunately, is that President Trump has not been able to push through his major policy initiatives thus far, other than Executive Orders. And it’s not because the Democrats oppose him – we knew the Dems would oppose Trump’s policies, just as the Republicans would have done if Hillary had been elected.
No, the problem is that some “establishment” Republicans also oppose Mr. Trump’s policies – or more likely, President Trump himself. Some of them basically don’t want to see this president succeed. This is inexcusable!
I’m not a big fan of President Trump, although I voted for him. I’ve said that before. In many ways, President Trump is his own worst enemy, shooting himself in the foot repeatedly with irrational actions and ill-thought statements. Yet that is NO EXCUSE for establishment Republicans to block him on his major policy priorities. But they’re doing it.
With confidence indexes soaring through the roof, as illustrated above, you’d think these old- guard Republicans would realize that such behavior will almost certainly hurt their re-election chances. But as “NeverTrumpers,” maybe they just can’t see it.