Posted on 02/25/2025 8:46:31 AM PST by Diana in Wisconsin
The numbers have NOT been “rear-view” since the election. They popped 20% after November 6. Confidence is forward-looking.
If DOGE is spectacularly successful, and income taxes (and the 16th Amendment) can be erased, that's an extra $10k-30k annually for every American family. That kind of infusion of money into the marketplace most certainly could cause a significant spike in inflation.
If that is indeed coming, Pres Trump might want to make a speech apologizing for the likely failure to keep that one campaign promise, because of the elimination of all federal income taxes. I'm pretty sure that the majority of the electorate will forgive that transgression, lol.
(FYI: ALL Federal income taxes totaled "only" $900bn in 2010. DOGE has supposedly found $1.1T in fraud and waste already. Even cutting all income taxes "only" in half, would cause a massive voting shift. At least 10-20% of all Dems would follow Tulsi and RFK to the GOP. The Democrat Party would be over, and likely replaced by a Progressive/Green Party.)
Fake news laced with bullshit.
Everybody except Democrats knows it’s going to take some time for Trump’s reforms to take effect.
(As if you needed reminding ... ) The election was in November; Trump was inaugurated in mid/late January. While the “confidence” indicator is a sampling of future expectations of consumers. Those opinions are informed by economic performance numbers that are published after the fact (rear-view mirror), and reflect (as I said) the waning days of the Biden administration. They’re also informed by anecdotal “evidence”, such as egg prices - which had and have nothing to do with Trump policies (yet).
Consumers aren’t trained economists, so these perceptions are more “how do you feel” going forward than they are predictors of future results. There was a “feel good” bounce for Biden upon his election, and confidence was then in a decidedly downward trend after that initial euphoria. Frankly, I’d attribute that early bounce more to MSM “fluffing” than any economic analysis.
Finally, I’d also note that virtually none of Trump’s economic plans have had any impact on the day-to-day economy as of yet, being barely a month into his term. I think the best you can say at present is people are in a “wait and see” mode, with conservatives (MAGA) being more optimistic, and the shell-shocked Dems being more pessimistic.
That’s a long-winded way of saying “take this report with a grain of salt”.
The stock market didn’t wait for January 20 to react.
Consumers, like investors, were ebullient because a new day was coming. Clearly, the immediate impact of the new administration hasn’t been the panacea some hoped for.
Dismissing data with a “grain of salt” is fine, but when the bond market reacts....and it is far more dispassionate than the stock market...then I as an investor have to pay attention.
Of course we are very early in the game, but I gauge the new administration’s messaging as extremely diffuse. You can agree with all the many new initiatives, but I think it’s fair to say that inflation reduction has not been as focused a message as it was during the campaign, and that might be part of the problem with confidence. (And no, I don’t think most consumers believe that DOGE will drive down food or fuel prices.)
“why the big disconnect over the past 4 years between our personal experiences and the government agency and media’s reporting?”
I know you’re not really asking a question, but:
A. Trump Derangement Syndrome.
B. The Enemy Media is a bunch of Socialist Democrat LIARS.
Exactly. One thing I’d like for the new Dept of Labor Secretary to do is correct the errant reporting of labor statistics. The revisions have become too incredible to believe and indicates the original incorrect reporting was done deliberately to create headlines for the media.
“One thing I’d like for the new Dept of Labor Secretary to do is correct the errant reporting of labor statistics.”
That would be fantastic. I say rip off the band aid and let’s get back to business!
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