US consumer turns blind eye to impeachment drama as confidence hits 7-month high

U.S. consumers shrugged off impeachment hearings for President Trump this month, with confidence surging to a seven-month high.

Consumer sentiment hit 99.3 in December, according to updated figures from the University of Michigan, as major stock indexes continued to touch new highs. The latest reading compares with a preliminary estimate of 99.2 and a reading of 96.8 the prior month.

“Most of the December gain was among upper-income households, with those in the top third of the income distribution gaining 7.5 percent from last month and those in the bottom two-thirds posting a gain of just 0.8 percent,” said Richard Curtin, chief economist of Surveys of Consumers.

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Only 2 percent of the survey’s respondents mentioned impeachment as having an impact on their economic expectations.

The December reading means the Sentiment Index averaged 92 from 2017 to 2019, making the first three years of Trump’s presidency the second-best extended period of optimism in the history of the survey.

The strongest was the four years from 1997 to 2000, which averaged 105.3 and also included impeachment. Former President Bill Clinton was impeached on December 19, 1998, on charges of lying under oath and obstructing justice.

The survey also found inflation expectations fell for both the year ahead and for the next five years.

The annual inflation rate is expected to be 2.3 percent in 2020, the lowest since the December 2016 and September 2010 readings of 2.2 percent, the survey found.

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Over the next five years, consumers expect annual inflation of 2.2 percent, the weakest since the survey began asking the question.