U.S. consumer confidence highest in 14 years

The importance of consumer confidence to economic growth cannot be overstated. When people feel good about the economy, they confidently spend and invest their money. Sometimes you get false consumer confidence that spurs people to spend for a period of time, but when it's not based on something fundamentally sound, it doesn't last for long. The most recently announced measure of consumer confidence, which comes from two well-established sources on the subject, suggests U.S. consumers are ignoring the political noise and coming to the conclusion that we're in for good things in 2018:

The University of Michigan said Friday its consumer-sentiment index was 99.7 in February, up from 95.7 in January. It was the second-highest monthly reading since January 2004, below only October’s 100.7 reading. Economists surveyed by The Wall Street Journal had expected a final February reading of 99.5, down from a preliminary figure of 99.9. “Consumers based their optimism on favorable assessments of jobs, wages and higher after-tax pay,” said Richard Curtin, the survey’s chief economist. U.S. households have been upbeat about the economy in recent months, with growth supported by rising incomes and low unemployment. The recent package of tax cuts also has boosted most workers’ take-home pay. However, the stock market has moved lower since late January. “Economic news heard by consumers continued to be dominated by the tax reform legislation and net job gains, which was untarnished by the consensus view that interest rates would increase and stock prices would remain volatile,” Mr. Curtin said. A separate measure of U.S. consumer confidence jumped in February to its highest level since November 2000, the Conference Board said Tuesday. That report showed Americans felt better about the current state of the economy as well as its future prospects.

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What this shows is that noise and propaganda can't trump reality for long. When the tax cut passed, Democrats and the news media did their best to persuade middle-income people it would be bad for them, and for awhile people's opinions of the tax cut were influenced by all that negative coverage. But then February paychecks arrived, and the first time people saw their take-home pay with the newly adjusted IRS tables, they realized the media hadn't told them the truth. More money in your pocket is more influential than whatever headline the New York Times or CNN tries to shove in front of your face. People are also feeling the results of deregulation, increased domestic energy production and the end of the federal government's constant legal and investigatory assault on the business sector. The bottom line is that things are getting better for a lot of people, and the more that happens, the less people take seriously all the shrieking from the news media and politicians about how horrible things are supposed to be. So what will be the real-life effect of growing consumer confidence? You'll likely see it reflected in stronger retail spending, as well as a greater inclination to buy durable goods like cars and appliances. If you've had the same laptop or phone for a few years and you've really been thinking you'd like a new one, you're more likely to go ahead and make that investment when you feel better about the economy in general. People thinking about starting businesses are more likely to do it when they believe the economy is getting stronger. So in spite of the best attempts by Democrats and the media to talk down the economy and scare people out of spending their money, it's not working. People see and feel that they're better off, and they're going to act accordingly. And perhaps as an added bonus, they will trust the media even less than they already do, which can only help this country in all kinds of ways.