Hitting the VIP and tippin’ 30%... Peeps are feelin’ good. According to a Morning Consult poll, this month US consumer sentiment (aka: how people feel about the economy and their finances) jumped across all income groups — but especially among those earning $100K+. That comes on the heels of the University of Michigan’s report, which found that in January consumer sentiment popped 13% to its highest level in more than two years. The past two months mark the biggest 180 in consumer sentiment since 1991. Notably, those warm fuzzies are being felt across the board:
All inclusive: Soaring sentiment was seen in consumers of different ages, income levels, and locations.
Both parties party: Democrats and Republicans both had their highest consumer sentiment readings since the summer of ’21.
Ridin’ high… It’s not just the #vibes that are popping. Yesterday, GDP data showed that last quarter the US economy grew at a 3.3% annualized rate— demolishing expectations of slower growth. What’s more, the S&P 500 has been cruising at record highs. FYI: among high earners, consumer sentiment is highly correlated to the stock market. And while wealthier Americans have more stock market wealth, as of 2022, a record 58% of US households owned stock. Also: job insecurity fears fell at the end of last year, though layoffs have been making headlines this month.
Economic mood swings take time… and often are lagging indicators. For much of last year, economic signals ranging from cooling inflation to resilient spending flashed green. And yet, that wasn’t reflected in consumer sentiment. Now, possibly tipping the scales: after nearly two years of real wage declines, last quarter wages rose even when adjusted for inflation — and consumer sentiment has risen with them.