Consumer Sentiment is an economic measurement of the health of the economy based on consumer opinion. The University of Michigan publishes monthly reports relating to the statistic of consumer sentiment. Prior to the election, within the October report, the consumer sentiment numbers hit a 5-month high. "The University of Michigan said Friday that its preliminary index of
sentiment for the month climbed to 91.6 from 87.2 in October. The median
projection in a Bloomberg survey called for 87.9. The report also
showed year-ahead inflation expectations rose the most since early 2015."
It is incredibly interesting to see why these numbers peaked. It is stated within' the article from Bloomberg that the main reasons for this peak were because, "Job and income gains helped to boost assessments of their finances,
underscoring forecasts of sustained consumer spending approaching the
holiday-shopping season. At the same time, the survey reflects responses
on or before Tuesday’s presidential election, and a “large majority” of
respondents based their outlooks for the economy on expectations of a
win by Hillary Clinton." Looking ahead to the November survey from the University of Michigan, it will be interesting to see how consumer sentiment will either rise or fall. On one hand, I would like to think the election wouldn't dramatically effect consumer sentiment, but on the other hand it should be interesting to see the response with an unexpected Trump victory.
http://www.bloomberg.com/news/articles/2016-11-11/u-s-consumer-sentiment-hits-five-month-high-before-election
I find it interesting the author quotes “Since those who expected a Clinton victory were more optimistic, the fear is that their expectations may be revised downward in a manner that extends beyond a temporary reaction to Clinton’s loss,”. Considering the Bloomberg Consumer Comfort Index is increasing for the third straight week, perhaps consumers aren't as pessimistic as one would think following the election aftermath. Increased optimism from consumers could result in short run boosts in economic growth.
ReplyDeleteOne thing I know is a certainty regardless of the elections is people will spend money regardless who the president is.
ReplyDelete