Yahoo Finance Trump's 'Thanks Donald!' tweet is accurate
On Tuesday night, President-elect Donald Trump took to Twitter to thank himself for one of the most positive economic readings we’ve seen in 15 years.
And he’s absolutely right.
“The U.S. Consumer Confidence Index for December surged nearly four points to 113.7, THE HIGHEST LEVEL IN MORE THAN 15 YEARS!” Trump tweeted.
Adding, “Thanks Donald!” in an apparent riff on the long-running “Thanks Obama” internet meme.
Trump’s tweet followed a Tuesday morning report from The Conference Board, which showed the consumer confidence index in December did rise to 113.7, a 4.3-point increase from November and the highest August 2001.
This jump was due to an increase in consumer expectations, which hit a 13-year high in December.
“The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,” said Lynn Franco, director of Economic Indicators at The Conference Board.
“Consumers’ assessment of current conditions, which declined, still suggests that economic growth continued through the final months of 2016. Looking ahead to 2017, consumers’ continued optimism will depend on whether or not their expectations are realized.”
This report adds to the growing body of evidence that the biggest post-election economic story — the surge in consumer and business expectations — has indeed been all about Donald Trump.
In a tweet on Tuesday, economists at Renaissance Macro noted that the recent surge in consumer confidence is consistent with a 4% increase in consumer spending. Consumer spending accounts for about 70% of GDP and is currently rising about 3% annually.
“Would be meaningful if it materializes or a big head-fake,” the firm wrote. The firm added in a note to clients that, “Given the euphoria after the election, we will await actual consumption data before passing final judgment.”
Last week, we learned that consumer sentiment according to the University of Michigan’s bi-monthly survey rose to a 13-year high. That report did, however, note that while 18% of respondents spontaneously mentioned positive economic impacts from the Trump administration, 16% also mentioned economic changes unfavorably.
The increase in certain surveys following Trump’s win, then, has not been met by unabashed optimism. Sort of like his election win.
But Trump’s Tuesday evening tweet about the economy — and its accuracy — is a bit of a departure from past proclamations Trump has made about the economy. Even within a day or two.
On Monday, Trump tweeted that the stock market is up about 10% since his election and that holiday spending (“Christmas spending,” according to Trump) is over a trillion dollars. Now, depending on which months you lump into that period, Trump might be right in time, but November-December retail spending this year is tracking closer to $550 billion, according to the National Retail Federation.
In the past, Trump has also called the Bureau of Labor Statistics’ official unemployment rate “phony” and touted other numbers that ran as high as 42%. The current unemployment rate is officially 4.6%.
And no doubt the economy has a long way to go before realizing any potential benefits from this post-election surge in both stock prices and optimism among some consumer and business leaders.
As Bloomberg View columnist Conor Sen noted on Tuesday, the recent uptick in optimism in older consumers came amid a decline among younger consumers.
People who own their home, are no longer raising children, and are living on a fixed retirement income are less likely to create a euphoric spending boom that propels the economy in the coming years than would younger, household-forming consumers.
But facts are facts: consumer confidence in the US is at its highest level since 2001, and Donald Trump isn’t wrong to attribute that rise to his election win.
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Myles Udland is a writer at Yahoo Finance. Follow him on Twitter @MylesUdland
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