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U.S. consumer confidence hits 15-year high

December 27, 2016

American consumers are the sunniest they've been in more than 15 years.

The Conference Board said Tuesday that its consumer confidence index climbed to 113.7 in December, up from 109.4 in November and the highest since it reached 114 in August 2001. It's another sign consumers are confident in the outcome of November's election.

The index measures consumers' assessment of current conditions, which dipped from November but was still very positive, and their expectations for the future, which hit a 13-year high.

Lynn Franco, director of economic indicators at the Conference Board, said the "post-election surge in optimism" was strongest among older Americans.

American households are expecting a Donald Trump administration to deliver. They are more upbeat about the prospects for the economy, labor market and their incomes, according to the Conference Board’s report. The results corroborate surveys by the University of Michigan and the National Federation of Independent Business, which showed jumps in household and business sentiment on Trump’s pledges to boost jobs, cut taxes and ease regulations.

The U.S. economy grew at a 3.5 percent annual pace from July to September, fastest in two years. Unemployment is at a nine-year low of 4.6 percent. Employers have added 180,000 jobs a month this year, down from an average 229,000 in 2015 but still solid.

Economists monitor consumers' mood closely because their spending accounts for about 70 percent of U.S. economic output.

"The election of Donald Trump has raised household expectations for the economy to a very high level," Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note. "It remains to be seen whether Trump can deliver," but the burst in confidence could drive consumer spending higher.

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