Consumer Sentiment Soars on Improved Optimism and Best Income Gains Since 1960

Supporters hold up MAGA hats as US President Donald Trump speaks during a rally in Manchester, New Hampshire on February 10, 2020. (Photo by JIM WATSON / AFP) (Photo by JIM WATSON/AFP via Getty Images)
JIM WATSON/AFP via Getty Images

American households are beginning the new year full of hope for the future, satisfaction with personal finances, improved outlooks for the economy, and rising incomes and wealth.

The University of Michigan’s consumer sentiment index rose to 100.9 in early February, higher than expectations for 99.7 and above the 99.8 level hit in January. That nearly matches March 2018’s 101.4, which was the highest score since 2004, making February the second-best reading in 15 years.

Improved consumer sentiment complicates Democratic plans to run against Trump’s economy by arguing that the gains are leaving too many Americans behind. In fact, gains in household wealth were reported more frequently in early February than any prior time since 1960, the University of Michigan’s survey of consumers showed.

The expectations index, a gauge of future economic conditions, rose to 92.6, the second-highest reading since the end of the last recession. Consumers’ evaluations of their personal financial situation as well as the national economy improved in the month.

Neither the coronavirus nor politics is having a big impact on consumer sentiment yet. The coronavirus was mentioned by just 7 percent of consumers surveyed and just 10 percent mentioned some aspect of the election as having an impact on their economic expectations.

 

 

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