By Craig Wilson
This post As Polling Numbers Fall, Is the Economy Next? appeared first on Daily Reckoning.
The stock market appears set for a massive reality check, and Trump’s polling numbers could signal that a shock to the financial system is coming.
A new survey, conducted by the Associated Press-NORC Center for Public Affairs Research, showed that 55 percent of those surveyed disapproved of how he’s handling the economy. The study also found that 65% of Americans say they think the country is on the wrong track.
So why does this matter to an economy that has seen U.S stock indices rally near 15% since Donald Trump has entered office?
The reality is that the “Trump trade” has met almost none of this Administration’s agenda and the likelihood of failure is not only settling in on the market, but hitting everyday Americans confidence.
These numbers show that American consumer confidence matter to belief that the President can offer economic prosperity. While it is true that this may not be the overall fault of this sitting president, it is his problem.
The theory is, if Americans feel that leadership and government is on the wrong track, can they rely on job security? That social psychology plays into spending habits, savings patterns and stock market interactions of the American consumer.
This impact might take at a very sizable view of the economy, but the cold reality is that the U.S economy may already be feeling the effects.
Featured in Bloomberg one financial analyst highlighted why he believes consumers aren’t spending in the economy and why retail sales are down.
As Gary Schilling noted:
“Many Americans are still stressed financially. The rises in incomes and net worth have predominantly gone to high-income and high-net-worth households… Those people, however, don’t change their spending appreciably as their assets and net worth rise. And with the ongoing polarization of incomes, the net-worth-induced wealth effect is declining.”
While spending shifts might seem feasible for those with steady incomes or to active market investors, consumption measurements don’t stop there.
Regardless of consumer confidence, under conditions that consumption slows, it is likely that investment trends follow.
Economist and New York Times best selling author Jim Rickards’ reports, “Businesses will not invest in buildings and heavy equipment unless the customers are there to purchase the output needed to justify those investments in the first place.”
“Simply put: when the consumer catches a cold, the entire economy can get pneumonia. Something like that appears to be happening.” notes Rickards’.
Should We Trust the Polls?
So what if the polling numbers on the President aren’t all they’re cracked up to be? What if it is simply Trump bias? Turning to other government leadership, the numbers offer an even more wistful indicator.
A recent poll from May 2017 found that nearly 74% of Americans, that’s nearly three out of every four people, disapprove of Congressional leadership.
What that corresponds with in the real economy does not offer an optimistic outlook. In fact, job numbers from the same month offered …read more
Source:: Daily Reckoning feed
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