Consumer Spending and Confidence are Up — Evidence of Trust?

Alexander/Adobe Stock

This past week’s retail numbers were the best in a long while. A wave of beat-the-street earnings reports have poured in, as it appears the subdued level of consumer spending in early 2017 has run its course.

Abercrombie & Fitch, Williams-Sonoma, Dollar Tree, Burlington Stores, PVH and Guess are all trading higher after exceeding expectations. Even Sears Holdings, is up 8%. Macy's and J.C. Penney are both up 1.8%. Dollar General didn't report, but is up 3.4%. While Walmart and Target’s stock prices haven’t necessarily raised any eyebrows, when consumer spending is up, the pull through effect to these giants is inevitable — the analysts are predicting holiday sales to be up by as much as 4%, with e-commerce sales forecasted to climb by nearly 17%.

And surprisingly, for the first time in recent polling memory, the majority of surveyed households across the U.S. are expressing a positive view of their financial health — perhaps the best indicator that consumer spending will continue to power an expanding economy. In fact, the “sentiment data” reflects a generally “good attitude” held by a majority of Americans, supporting a favorable economic outlook that would seem to have legs. Again, it’s not lower prices and interest rates but confidence in the job markets and rising incomes.

However, polling data not only remains skewed by political affiliation, but by the manner in which the numbers are reported. With one headline reading “Consumer Confidence Lowest Since Trump Election” and another saying “Consumer Confidence at 16 Year High,” it remains difficult, if not problematic, for most Americans to realize that both statements are true.

Bill Clinton is famous for saying “it’s the economy, stupid.” As if you needed more evidence supporting the timeless wisdom of that statement, just know that our current president —someone as polarizing as he is — is presiding over an economy where consumer attitudes are besting the actual growth numbers.

Speaking of bad attitudes, Suzanne Collins, an American author best known for The Hunger Games trilogy, is quoted as saying, We’re fickle, stupid beings with poor memories and a great gift for self-destruction.” While I can agree with “fickle,” “stupid” and “with poor memories,” I’ve got to draw the line on “self-destruction.” It would appear that what the sentiment data are actually telling us is that the economic turnaround that we thought we felt in Obama’s second term and has continued under Trump is real — and despite political affiliation, that most of us are finally learning to trust it.

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