It turns out that it isn’t just the attitude of business owners and managers that is improving in November. The post-election rally has been impossible to ignore, and that appears to have bled over to the consumer side as well. This surge in sentiment was directly focused in the post-election period.

The University of Michigan has released its final Consumer Sentiment results for November 2016 up at 93.8. The preliminary report released earlier this month for a reading pre-election was at 91.6. Bloomberg’s consensus was 91.6 versus a consensus estimate of 91.8 from Dow Jones (Wall Street Journal).

What matters the most about this revised data for consumer sentiment is that it includes post-election data. Many economic reports are still including only October data, before the election results were known.

Current conditions were 107.3 in November, up 4.0% from the prior month and up 2.9% from the reading a year ago. Consumer expectations rose much more on the monthly reading — up to 85.2 in November, climbing 10.9% from the prior month and up 2.8% from a year ago.

While many economists hate to focus on election results, the reality is that the University of Michigan has pointed directly to the election, even singling out the Trump victory. Still, there are some realities that should be considered. November’s sentiment summary report said:

The initial reaction of consumers to Trump’s victory was to express greater optimism about their personal finances as well as improved prospects for the national economy. The post-election gain in the Sentiment Index was +8.2 points above the November pre-election reading, pushing the Index +6.6 points higher for the entire month above the October reading.

The post-election boost in optimism was widespread, with gains recorded among all income and age subgroups and across all regions of the country. The upsurge in favorable economic prospects is not surprising given Trump’s populist policy views, and it was perhaps exaggerated by what most considered a surprising victory as well as by a widespread sense of relief that the election had finally ended.

To be sure, no surge in economic expectations can long be sustained without actual improvements in economic conditions. Presidential honeymoons represent a period in which the promise of gains holds sway over actual economic conditions. Presidential honeymoons, however, can quickly end if they are unaccompanied by prospects that economic conditions will actually improve in the future. President-elect Trump appears to appreciate the importance of his first hundred days; the key issue is whether his economic policies will resonate with the nation’s consumers.

What the report further suggests is that the data indicate that consumer spending will rise by 2.5% in 2017. With roughly two-thirds of GDP being tied to consumer spending, this could help set the stage for those hopes of stronger GDP growth.

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