Consumers, businesses, and CEOs are all loving life since Trump's election — and that's great news for the economy


Americans from all corners of the economy seem to be enjoying the conditions a lot more since the election of Donald Trump.

Nearly every measure of consumer, business, or executive confidence has gained in the month since the election according to Michelle Meyer, chief US economist at Bank of America Merrill Lynch.

"The data clearly show that consumers, investors, and business CEOs have all become more optimistic since the election," wrote Meyer in a note to clients on Thursday.

Everything from regional manufacturing indexes to consumer confidence surveys to investor sentiment have ticked up since November 8. The only survey that has slid is the ISM-adjusted Empire Manufacturing survey that measures confidence of New York state manufacturers.

"Bottom line: most business activity surveys point to greater confidence following the election," concluded Meyer.

The biggest confidence boost has come from consumers according to Meyer, with both the Conference Board and Investor's Business Daily (IBD) & TechnoMetrica Market Intelligence (TIPP) indexes hitting post-recession highs.

Investors and CEOs have seen jumps, but are still not overflowing with confidence according to the note.

"However, investor and CEO confidence are still subdued, with the former only modestly above its average since 2010 (52.9) and the latter much below (84.1)," wrote Meyer.

Screen Shot 2016 12 08 at 2.06.28 PM
Screen Shot 2016 12 08 at 2.06.28 PM

Shannon Stapleton/Reuters

This sort of upswing in confidence usually starts to show up outside of surveys and in real data in a short amount of time, based on Meyer's analysis. The business indexes increasing usually point to an increase in capital expenditures, while the consumer confidence indicators have a good job of predicting consumer spending.

Screen Shot 2016 12 08 at 1.49.51 PM
Screen Shot 2016 12 08 at 1.49.51 PM

Shannon Stapleton/Reuters

Some of the correlations are weaker than others, said Meyer, but directionally they point to higher output for the US economy.

"Overall, we see a significant relationship between surveys and actual output, but we would be careful given lags and historical episodes with misleading signals," said the note.

While it is unclear whether this is specifically due to Trump's election or simply the election uncertainty being over, it is a great sign for the US economy.

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