U.S. consumer confidence sank to a record low this month, but not everyone is feeling so blue.
Confidence among higher-income earners, those making $50,000 and up, rose in January, according to Conference Board data. Meanwhile, the poorest Americans, earning less than $15,000 a year, were their most pessimistic ever.
The confidence gap between these two camps, shown in the graph above, can be telling.
Going back about 20 years, richer Americans are the most overconfident relative to the poor near the peak of an expansion and the least overconfident at the trough of a recession. December marked just such a trough — for now, at least. Then, the survey’s poorest respondents actually were more confident than those better off financially for the first time ever.
What’s next? The end of the last two recessions has been signaled by a rapid widening of that wealthy vs poor confidence gap. January’s data — released Tuesday — show just such a snap back.
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8 comments so far
Chasing lines on a chart is what got us into this mess. My “confidence level” in such analysis is at an all-time low. I think the term “voodoo economics” should be dusted off.
- Posted by der WahrheitWhy assume December is the bottom of the trough? I can easily see February’s graph being even lower, in the light of my current prediction of the next significant low on the DOW index being 6,578.
- Posted by Loraine ConnonThis article is an example of mind-blowing technical analysis :). It is just so sad, that many people will actually believe it
- Posted by ananke2009 will be much worse than 2008 which of course was plenty bad. As long as the US blows billions bailing out banks, auto manufactures, Wall Street and people who bought more house than they could afford, we will never get out of this mess.
- Posted by torgo2009The US is printing more and more dollars that will ultimately prove to be worth less and less.
Our politicians have committed financial treason…and they continue to do so.
Best advice: Save, don’t spend.
Uhhhh maybe people’s confidence went up because the recession was getting better. But before that since things weren’t improving yet they were getting more and more pessimistic? Seems pretty obvious. People don’t like being in a recession….
- Posted by JelloI think it would be safer to say that the recession (depression) is over when people start going back to work and buisnesses start selling the products/services again.
- Posted by Robert LudwigCorrelation does not equal causation, come on people, let’s stick to reality.
- Posted by David PattersonThese things really are indicators. It is important to examine what has gone on in the past and to study previous historical events, its also important to understand historical paths of behavior during social and political crisis. It does seem that these economists often boil it down to charts and graphs, but at times they really can help guide the way or at the very least warn you about what could happen without proper planning.
- Posted by harryzimm