Manufacturing Optimism Is At Record Highs, As Are Other Optimism Indexes Under Trump | Stock News & Stock Market Analysis

Economy: Just before Friday’s mixed-bag jobs report came out, a survey showed that manufacturers’ optimism is at its highest level in decades. This is part of a broad and sustained trend that has gone largely unremarked.

XAutoplay: On | OffThe National Association of Manufacturers reports that for the first three quarters of this year, an average of 90.9% of manufacturers said they were positive about their own company’s outlook, the highest three-quarter reading in the survey’s 20-year history, according to NAM.

By contrast, just 59.8% of manufacturers had a positive outlook in the first three quarters of last year.

This is a stunning turnaround in optimism. But it’s hardly the only example.

  • Gallup’s investor optimism index hit a 17-year high in September. And Gallup’s weekly economic confidence index has been in positive territory since November 2016, after being in negative territory for all but a handful of weeks since 2008.
  • The Conference Board’s Consumer Confidence Index dipped in September to 119.8, but was still up 20% from its 2016 average.
  • The University of Michigan’s Index of Consumer Sentiment has averaged 96.2 so far this year, compared with 91.4 over the same time period last year. In fact, you have to go back to 2004 to find another nine-month stretch where the index was in the mid-to-high 90s.
  • The Small Business Optimism Index has averaged 104.9 through August, according to the National Federation of Independent Business. That’s up nearly 12% from the year before. More than a quarter of small businesses say the next three months will be a “good time to expand,” compared with 9% who said that a year ago.
  • In September, the IBD/TIPP Economic Optimism Index marked its 12th straight month in positive territory, the first time that’s happened in 12 years. The index stood at 53.4 in September. Last year it averaged 48.6. (Anything below 50 is pessimistic.)
  • The stock market, which is one of the best optimism indexes out there — since people are voting with their own money — has been at historic highs as well. The Dow Jones industrial average closed the week at 22,771.64. That’s up 14% for the year, and 24.5% compared with a year ago.

It is important to note that all these indexes — all of them — started to rocket upward after November 2016.

What could have happened to have caused this jump in optimism, we wonder? Did Mars and Saturn enter some kind of new alignment in the astrological charts? Was there an unprecedented surge in GDP growth? A scientific breakthrough? A major peace deal?

We would submit that it had something to do with the November election results. And there’s good reason to think this.

Remember, nobody expected pro-business Republican Donald Trump to win. So all those pre-election surveys showing dismal outlooks all assumed that Hillary Clinton would be in the White House today.

It was only after Trump — to everyone’s shock — emerged victorious that we saw this incredible surge in optimism across the board.

Why isn’t anyone talking about this? The virulent hatred of Trump among the establishment in Washington and the news media is the mostly likely explanation. No good news about him can ever get covered, it seems.

But ignoring this welcome phenomenon doesn’t make it any less real, or any less important to the economic fortunes of the country.


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Originally posted 2017-10-08 03:27:35.


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