August consumer confidence highest this century. Will it matter come November?

No doubt it’s all Trump’s fault. But the confidence of American consumers this month soared to its highest level since 2000.

It’s good news, so you may not have heard much about it in media.

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But the Conference Board reports its consumer confidence index rose to 133.4 this month, up from a reading of 127.9 in July. August has the highest reading since confidence stood at 135.8 just before the 2000 election.

Confidence in consumers’ minds involves many factors, but their ability to get a job and sense of the overall economy are important indicators of how freely they will spend in coming months, mainly on big-ticket items such as cars.

Consumer confidence is key to economic success because consumer spending comprises 70 percent of economic activity.

According to Lynn Franco, the Board’s director of economic indicators:

Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018. These historically high confidence levels should continue to support healthy consumer spending in the near term.

The job market is booming, so wages have inched up. Annualized economic growth from April to June was at a 4.1 percent rate, then revised upward Wednesday to 4.2 percent, much better than the one percent range before Trump’s inauguration and the GOP tax cuts signed last December.

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One might expect Republicans to benefit in the midterm elections coming in 10 weeks. But they’ve been unable to drive home their point. History and recent polls seem to indicate that voters are not giving them the political credit.

Midterm elections, especially the first of a new presidency, historically do not go well for the party controlling the White House. They’ve lost House seats in 18 of the last 20 midterms. Democrats need gain only 23 seats to retake control there.

In another economic measure of consumer sentiment, the IBD/TIPP Financial-Related Stress Index dropped another 4.2 points this month to 47.4, the lowest reading in almost 11 years. It was the second record low of the year.

The measure reads the stress levels that Americans feel regarding their personal finances. Its data predicts consumer financial stress should remain low in coming months.

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Beege Welborn 5:00 PM | December 24, 2024
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