Finance

U.S. Economic Confidence Dips After Spike

| by Oren Peleg

The U.S. Economic Confidence Index for the week ending March 12 stood at nine points. The index returned to average post-election levels after peaking at 16 points the previous week.

"The current +9 reading also matches the average for weekly confidence scores since the presidential election in November," Gallup, which conducted the survey, noted in the report. "Since late November, Americans have expressed higher confidence in the U.S. economy than they have during any period since Gallup began tracking the index in 2008."

This level of confidence further matches gains in the U.S. stock market. The Dow Jones Industrial Average hit an historical high of 21,115.55 on March 1, notes The Balance.

“The market is way over-priced,’’ Robert Shiller, a Nobel prize-winning economist, said, notes Bloomberg. “It’s not as intellectual as people would think, or as economists would have you believe.’’

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“I don’t generally call the entire market wrong -- investors are very smart, highly motivated individuals -- but I find it hard to say why stock markets are so un-volatile right now,’’ Nicholas Bloom, a Stanford University economist, added.

However, Ethan Harris, global economist with Bank of America Merrill Lynch, offered an explanation.

“It’s been a period of repeated shocks, and I think people get toughened against that,” Harris said. “It seems like uncertainty is the new norm, so you just learn to live with it.”

Meanwhile, the Trump presidency has given confidence to American CEOs, reports the Los Angeles Times.

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“Clearly CEOs are very positive about prospects for hiring, sales and investment,” Joshua Bolten, president of the Business Roundtable, stated. “Their view of the overall economy has also brightened slightly."

“I am enthusiastic about the opportunity to enact a meaningful pro-growth agenda that will benefit all Americans,” he began. “As these results confirm, business confidence and optimism have increased dramatically.”

"The Trump administration and the congressional leadership are promoting an agenda that our CEOs view as very positive," Bolten continued. "There’s obviously a lot of turbulence around the healthcare act but the other elements of the agenda, we think, are well on track.”

Sources: Gallup, Bloomberg, Los Angeles Times / Photo Credit: Kevin Hutchinson/Flickr

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