US consumers are at their most confident in 13 years, finds a closely watched indicator – does this point to boom times?The latest US consumer confidence index produced by the Conference Board rose to 113.7 in November, that was the highest reading since December 2003, and up some four points from November when the index scored 109.4, itself a nine-year high.
The jump was down to a rise in the expectations index, which surged from 94.4 to 105.5, the Present Situation Index actually fell slightly.
Cleary, when US consumers are feeling that confidence and expectations are running so high, the implications for the US economy are good indeed.
With US unemployment recently falling to a nine-year low, it does rather appear as if the conditions are in place for a booming US economy next year. President-elect Trump’s planned tax cuts will help too, although the anticipation of these cuts was probably a factor in rising consumer confidence.
Planned infrastructure investment is less likely to have an immediate impact and may not have a marked effected on the US economy until 2018 or even 2019.
The surge in consumer confidence was helped by recent rises in the US stock market – but then this can lead to a virtuous cycle – consumer confidence rises because stocks are up, stocks rise because consumer confidence is up.
Regardless, conditions now seem to be in place for the US economy to enjoy its stronger performance since the days before the 2008 crash.