Donald Trump campaigned on changing the culture of Washington. While the outcome of that effort may not be clear for some time, outside the Beltway, consumers and people worried about the budget deficit have been feeling more confident since Trump’s election victory in November.
The University of Michigan’s consumer sentiment index dipped slightly in February, reversing after three months of gains. The index fell to 96.3 in February, from 98.5 in January. Under the way the index is calculated, a level of 100 is neutral, while numbers above that are positive and numbers below that are negative. In October, the index stood at 87.2
Notably, the University of Michigan says the boost in sentiment is mostly along party lines.
“Overall, the Sentiment Index has been higher during the past three months than any time since March 2004,” said Richard Curtain, Surveys of Consumers chief economist, in a Feb. 24 statement. “Normally, the implication would be that consumers expected Trump's election to have a positive economic impact. That is not the case since the gain represents the result of an unprecedented partisan divergence, with Democrats expecting recession and Republicans expecting robust growth.”
A similar survey is conducted monthly by the Peter G. Peterson Foundation, an anti-deficit group named after a former Republican Commerce Department secretary and investor.
The fiscal confidence index is modeled after the consumer sentiment one, including having 100 be the neutral mark, and is meant to measure Americans’ level of concern about the deficit, whether dealing with it should be prioritized and their expectations ahead on the debt.
The January index, released Jan. 31, hit a record 67 after being at a then-record level of 60 in the prior two months. The expectations component rose to 109 in January from 103 in December, showing an increase in the share of survey respondents optimistic progress will be made on dealing with the national debt.
“Voters hope and expect that our new president and Congress will prioritize fiscal responsibility as a necessary component of the policy agenda,” said Michael Peterson, the Peterson Foundation’s CEO. The fiscal confidence survey has been compiled since December 2012.
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