Kamala Harris single-handedly increased consumer confidence in the United States.
Kamala Harris improved US consumer confidence about the economy, a University of Michigan survey found. Harris is the likely Democratic presidential nominee for the November elections and will be confirmed at the Chicago National Convention next week.
The University of Michigan’s consumer confidence survey registered a surge to 67.8, above market expectations of 66.9 and up from 66.4 in July.
A swath of positive economic data backed the survey in recent weeks. Inflation dropped to 2.9% in July, pointing to a stable path to the 2% target. Unemployment, though slightly edging up, still shows a healthy labor market with fewer than expected jobless claims.
“This week’s jam-packed data calendar delivered mostly good news. Inflation was generally tepid, and activity still looks healthy,” Bank of America Securities head of economics Michael Gapen said.
Despite the positive data, consumers feared recession earlier this month, when global markets plunged on their worst day since the pandemic. Although stocks rebounded in the following days, the “Black Monday” left many consumers on the edge of their seats.
Many economists downplayed recession fears, pointing to the outstanding GDP growth despite two consecutive years of high interest rates. In the last quarter, the US economy expanded by 2.8%, far above expectations for 2% growth.
Democrats ramp up their hopes
The survey found that 41% of American consumers believe Kamala Harris will be better for the economy than her opponent. Donald Trump, the Republican nominee, got 38% in the same survey.
When President Joe Biden was still running for reelection, his confidence results in the economy were below Donald Trump’s.
Kamala Harris will unveil her economic agenda on Friday, placing inflation as the number one priority. She promised to pass a bill against price gauging in the first 100 days of the administration. Price gauging is the practice by big corporations of artificially increasing prices using inflation as a political shield.
She also promised additional welfare measures and direct stimuli to the real estate market to incentivize the construction of new homes.
Still, Republican electors believe Donald Trump would fare better on the economy, even though many experts said his proposals would increase inflation. Trump is running on an isolationist agenda, promising tariffs on goods from China and the European Union.
As University of Michigan director Joanne Hsu pointed out, consumer expectations of inflation are often self-fulfilling. Consumers will spend according to their personal feelings on inflation, which will then actually drive prices up or down.
