CNBC conducted a survey before Christmas. Economic optimism is soaring. The network noted that for the first time in over a decade, more than half of the respondents said the economy was good or excellent. The results of this survey were released on December 18, four days before President Trump signed the most extensive tax reform into law in nearly 30 years. The good economic news has not been able to buoy Trump’s approval numbers, but this survey suggest that the president could be yielding some dividends on that front as well (via CNBC):
The CNBC All-American Economic Survey found that for the first time in at least 11 years, more than half of respondents to the survey rated the economy as good or excellent, while a near record 41 percent expected the economy to improve in the next year.
"We're not measuring a marginal change in the economy, we're measuring a different economy,'' said Public Opinion Strategies' Micah Roberts, the Republican pollster for the survey. The poll of 800 adults across the nation, with a margin of error of 3.5 percentage points, was conducted Dec. 10-13 by that firm and Democratic pollster Hart Research.
The survey found that 42 percent of Americans expect their wages to rise in the next year, and 41 percent of homeowners see their home values going up, the highest level recorded since 2007. In 2011, while the country remained in an economic funk from the financial crisis, just 15 percent of homeowners thought their home prices would rise.
2017 is the year that Americans finally put the recession behind them in terms of their attitudes about the economy, and it took a change in leadership" to make it happen, said Roberts.
Trump's approval rating has mostly been disconnected from the better economic data but that could be changing. With gross domestic product rising strongly the past two quarters and the unemployment rate remaining low, Trump's approval rating has jumped.
Forty-two percent in the poll approve of the job Trump is doing as president, up 4 points from the September survey, while 49 percent disapprove, down 3 points.
So far, the fourth quarter is growing near four percent. Unemployment is at a near two-decade low. Consumer confidence is at a 17-year high. When it became clear that this tax bill, which offers relief to 80 percent of Americans, was about to pass, scores of companies gave their workers bonuses, promised to increase employee investments, and boost philanthropic giving. This is a middle class tax cut, which Democrats will have to explain why they were opposed it as its benefits become clearer in the coming months.
As for 2018’s economic outlook, the 5,000-point surge on the Dow Jones, the largest annual gain in its history, is probably not going to happen again. Yet, The Washington Post added that there is little agreement as to what will cause a possible setback. The publications also added that the tax bill could help keep the markets on a steady upward track:
The steady rise has generated trillions in gains for investors as Wall Street banked on strong corporate profits, global economic strength and Republican efforts — led by President Trump — to cut business taxes and curb regulations.
Many analysts say it is unlikely that 2018 will match this year’s performance, though there is little consensus on how and when a pullback might occur. A sell-off could be triggered by the shock of some unforeseen global event, a new trade war, a rise in inflation, or a jump in interest rates that remain at historic lows. For now, though, events that might once have spooked the market don’t seem to have the same effect.
Rising U.S. tensions with North Korea, an economic slowdown in China, the fallout from Britain’s decision to leave the European Union and even a special prosecutor investigation into Russian meddling into the 2016 election failed to shake markets, analysts note. Stocks continued to climb even as three hurricanes caused massive damage to the United States and its territories and the Trump administration struggled to pass key legislative goals, such as repealing the Affordable Care Act.
“Nothing seems to get in the way. All sorts of things that would have held back investors before are not now,” said Art Hogan, chief market strategist at the investment bank B Riley FBR.
Investors “just don’t believe that we’re going to war with North Korea, or they believe that it will be a quick one,” added Jeff Carbone, a financial adviser with Cornerstone Financial Partners. “Whether you call it confidence or complacency, it seems like investors are just shrugging off geopolitical issues.”
Many on Wall Street expect the stock markets to be propelled forward in 2018 by the recently adopted tax bill that lowered the corporate tax rate to 21 percent from 35 percent and trimmed taxes for many individuals, while giving the biggest cuts to the wealthy. In the past, studies show, companies often returned the savings to investors in the form of share buybacks and dividends.
Well, here’s to keep America going forward.