The Flinchum File

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Reagan People ?


Remembering our eternally optimistic former President, consumer confidence came out this week, and it was higher than expected. Consumer sentiment (a close cousin) came out today, and it was much higher than expected. Why is there so much optimism?

In 1980, average income was $24 thousand, compared to $40 thousand today. Life expectancy has gone up from 78 to 81 years. Crime has decreased from 17 violent crimes per 1,000 people to only 5 crimes now. Maybe, there is more to life than the stock market?

To the surprise of most analysts, consumer spending has picked up more than expected, which is critical to the economy. Apparently, those people who still have jobs are now confident enough of keeping their jobs that they are loosening the pursestrings slightly.

While inflows to equity mutual funds have also picked up, it is still far below historic norms. When that returns to normal, the Good Times will be back! And, President Reagan will be happy for this!

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