Wealthy Americans were far better equipped to weather the recession caused by the pandemic. Yet they're now the gloomiest as the economy continues to rebound, Ben Wick reported for Business Insider.
Photo Insert: The stock market only partially recovered January losses in the first weeks of February and has traded with greater volatility so wealthier Americans have plenty of reason to be upset.
Americans aren't feeling great about the recovery. The University of Michigan's Consumer Sentiment Index plummeted to 61.7 from 67.2 in a preliminary February reading, according to a Friday report.
That's the lowest since October 2011 and down 15.1 points from levels seen one year ago. Expectations for the economy also cratered to the weakest level in a decade.
The latest leg lower was entirely fueled by souring sentiments among households with incomes of at least $100,000, Richard Curtin, chief economist at the University of Michigan's Surveys of Consumers, said.
While the final February reading could show sentiment falling among other groups, the early data signals wealthier Americans are feeling the greatest pressure as the economy heals.
To be sure, they have plenty to be upset about. The stock market only partially recovered January losses in the first weeks of February and has traded with greater volatility. Since wealthy adults are the most likely to hold their cash in stocks, the market turbulence likely hampered optimism. Soaring prices continued to drag on moods.
Data out Thursday showed inflation accelerating in January to its fastest pace since 1982. One-third of surveyed adults cited higher inflation and its effect on personal finances for their weak sentiments, Curtin said. Nearly half of all adults expect their inflation-adjusted earnings to drop in the next 12 months, he added.