Americans clearly voted against the Joe Biden economy in 2024, with inflation and the perception of Democratic ineptitude clinching Donald Trump’s presidential win. Consumer confidence jumped up after the election, as if economic salvation was at hand.
Just one month into Trump’s presidency, however, Americans are gloomier than they were at the end of Biden’s. The Conference Board’s consumer confidence index has sunk to the lowest level since last June. “Pessimism about the future returned” is how the Conference Board explained the shift. The index is now near the depressed levels of 2022, when inflation was raging, and the expectations index is near levels often associated with recession.
The investor class isn’t feeling any better. The monthly survey by the American Association of Individual Investors shows bullish sentiment to be at the lowest level since March of 2023. Since Trump took office, the S&P 500 index has dipped by about 1%, mainly because Trump’s tariff threats — and his attempt to dismantle the federal government — threaten growth and profits.
Semafor sarcastically highlighted the “American exceptionalism” trade by pointing out that the stock markets in Hong Kong, Europe, and Mexico have handily outperformed US stocks since Trump took office. In a Feb. 27 video briefing, Tom Lee, co-founder of investing firm Fundstrat, said, “Clients have begun talking about, what exactly is the White House’s goal? Do they want stock prices to fall?”
Trump has a mystical belief in his own powers, and he continues to insist that his unique blend of protectionism, government shrinkage, deregulation, and tax cuts will produce a new “golden age.”
“Since the election, the CONFIDENCE in our nation…the CONFIDENCE in business, the CONFIDENCE in our Country has reached an ALL-TIME HIGH,” Trump posted on social media on Feb. 26. That was one day after the Conference Board survey showed that in the real world, “CONFIDENCE” had fallen three months in a row.
Can Trump convince Americans that they’re more confident than they are, or that the economy is better than they think it is?
Biden certainly tried. He repeatedly gave speeches touting record job growth, the resurgence of unions and declining inflation, while his dismal approval ratings remained stuck below 40%. After Vice President Kamala Harris replaced Biden as the Democratic candidate last summer, she obviously failed to persuade voters to stick with the Democratic plan.
Trump may face an even tougher sell now because there are new signs of cracks in the economy. Claims for unemployment insurance, for instance, jumped in the most recent week. That could be a blip, but it could also be the start of a rising trend in unemployment, with Trump’s federal layoffs one factor.
