Reality finally may be sinking in:
It appears Americans are finally feeling better about the economy.
Consumer
sentiment, a window into the nation’s financial mood, jumped 13 percent
in January to its highest level since mid-2021, reflecting optimism
that inflation is easing and incomes are rising, according to a closely
watched survey by the University of Michigan. Since November, consumer
sentiment has risen 29 percent, marking the largest two-month increase
in more than 30 years.
Gas prices,
often a key driver of sentiment, have fallen 40 percent since June
2022, to just over $3 a gallon. Weekly jobless claims are at their
lowest level in more than a year. Sales of cars, clothing and sporting
goods all picked up during the holidays, as consumers felt confident
enough to keep spending.
Meanwhile, the stock market is surging to new records, with the S&P 500 closing at an all-time high on Friday.
Many are hopeful, too, that interest rates have peaked and the Federal Reserve may begin to cut them this year, which would make it cheaper to borrow for a range of items, including cars and homes.
“We’re
seeing a continuation of the surge in sentiment we saw at the end of
last year,” said Joanne W. Hsu, an economist at the University of
Michigan and director of its consumer surveys. “If anyone was wondering,
‘Was December a fluke?,’ it is absolutely clear now that it wasn’t.
This is a sign that consumers are feeling better. Their confidence has
come back.”
That
jump is fueling hope that the U.S. economy — and Americans’ perception
of it — may be turning a corner after months of inflation-related
unease. Rising sentiment among both Democrats and Republicans comes at a
critical moment for the Biden administration, which has struggled to
convince voters that its economic policies are making their lives better
ahead of November’s presidential election... (our emphasis)
Well, if there's one major factor in the Biden administration's struggle "to convince voters that its economic policies are making their lives better," it's been the unrelenting Republican- wired media- adopted narrative that the economy was a disaster (just ask these guys wearing MAGA hats in that Kansas diner!). This shifting sentiment, if it holds and is widespread over the coming 9 months, is largely in spite of the media's "if it bleeds it leads" focus on every silver lining's cloud. Given the economy's trajectory (inflation down, gas prices down, incomes up, etc.), it would be hard to keep that favored narrative alive forever, though. Now we have real data showing optimistic consumer sentiment going into election season. It'll also be hard to spin that away, though count on Republicans and MAGA media to try (see Fox's parallel universe Tweet below).
