Yesterday the Conference Board reported that in May consumer confidence surged by 12.3, the largest monthly increase in four years. Bloomberg said the surge was bigger than any private sector economists Bloomberg contacted for their survey. The data suggests consumer confidence was already moving up and then surged forward after Donald Trump made a series of “deals”, most notably with China, reducing the fear of tariffs or an economic slowdown tied to them. It’s important to note that these weren’t “deals” in any meaningful sense. He just agreed with the countries in questions, most importantly with China, to go back to the way things were before he introduced his tariffs with small continual residual tariffs. In a way Trump is getting credit for caving. But in reality these shifts in consumer sentiment are rational reactions to Trump’s actions. The strangling tariffs were the problem. Trump decided to mostly get rid of them, at least for now. So people’s expectations about the economy improved. It makes perfect sense.