Source: Economics Group of Wells Fargo Bank, N.A.
Summary
Consumers grew a bit more optimistic on current conditions around the start of the all-important holiday sales season, but expectations around the future remain grim. There is a divergence in optimism related to households’ political views, most notably around coming inflation, which the Fed will continue to monitor closely.
Well That Was Quick
Consumer sentiment perked up in early December, reaching a nine-month-high at 74.0 (chart). This preliminary December release ran from November 19 to December 2, giving us additional color on how the election outcome has immediately shaped sentiment and how households felt during the all-important traditional kick-off to the holiday sales season (Black Friday). As we’ll elaborate, there is evidence consumers received a jolt to confidence from the election outcome, namely those identifying as Republican, but consumers are still on average worried about the economy, most notably inflation, and remain cautious on the future.