Twelve Charts That Show a Massive Divide in How Americans See the Economy
In the midst of a heated presidential election campaign, it's clear that America is a nation divided on both personal pocketbook issues and those relating to the national economy.
Democrats more confident about the economy, personal finances, and buying conditions
Some of these differences play out along partisan lines. For instance, Democratic consumer sentiment increased markedly relative to Republican consumer sentiment upon recapturing the White House in 2009, with the gap between the two rising to its highest level on record.
Whites more confident than Blacks or Hispanics
Other dividing lines form among demographics, including race, age, education, income, and geography. The Bloomberg Consumer Comfort Index, which asks respondents about the state of the U.S. economy, their personal finances, and buying conditions, shows confidence is higher among whites than non-whites.
College-educated Americans much more in favor of government economic policy
While both college-educated and those with a high school education or less have a negative view on the government's economic policy, a yawning gap has opened up, with the better-educated cohort relatively much more positive, according to the University of Michigan's monthly survey.
Higher education means higher hopes for financial prospects and retirement
Those with a college degree are similarly much more confident that their financial situation will be better in five years than it is now, a continuation of the longer-term trend...
...and they're also much more confident that they'll be able to retire in relative comfort.
The poor are much more worried about retirement income than the rich
This divergence is particularly acute by income brackets. The share of people in the top one-third of income who believe they'll receive enough to live on in retirement is near all-time highs. The same metric is approaching its lowest level for the bottom third of income earners.
Older people have a particularly bad view of the economy from media reports
For those who are older now, however, news has given them a much gloomier impression of how the U.S. economy has fared.
Older Americans consistently more negative on their potential for financial betterment
This downcast view also manifests itself as relative pessimism on whether or not their financial situation will improve over the next five years.
Breadth of improvement among lower-income households is on the rise
While a larger share of the middle and top ends of the income spectrum continue to report an improving financial situation relative to one year ago, the bottom third has closed the gap in recent readings.
Sentiment is starting to turn up in the South
Regionally, there are signs that the South is in the midst of a trough, with respondents to the University of Michigan survey indicating business conditions had improved over the past twelve months. Other regions have been trending in the opposite direction.
In addition, the expected change in unemployment index is ticking higher in the South (which somewhat counterintuitively suggests a lower perceived risk of a spike in unemployment).
Homebuilders, meanwhile, are more confident in the South and West, a testament to the potential for more robust household formation in those regions going forward, according to the National Association of Home Builders.