Confidence in Economy Drives Most Positive Outlook in More than Three Years

Continuing the positive trend that began last September, the overall Spectrem Affluent Household Outlook increased from 11.6% in December to 23.2%, its highest level since July 2007 before the economic downturn.
All of the Outlook components, which are based on investor attitudes regarding issues impacting their daily lives, showed increases in January. The component with the largest overall increase was the Economy, which jumped from 21.2% in December to 39.2%, a level not attained since June 2004. Household Assets just slightly more than doubled from 10% last month to 21.6% and Company Health also had its strongest showing in more than three years increasing from 8.8% to 16.4%. Household Income increased 8% to 15.6%, the best reading in this category since August 2008.
The overall Non-Millionaire Outlook weighed in at 22.5% in January, a significant increase from 1.8% last month. The Millionaire Outlook showed more modest growth from 21.9% to 25%. Non-Millionaire households showed major increases over last month in all component factors. The Economy increased to 44% from 11.6%, Household Assets increased to 15.6% from -4.5%, and Company Health increased from -0.9% last month to 13.8%. The Millionaire Outlook saw gains in every component factor except Company Health, which decreased from 19.8% last month to 19.3%.
Beyond possible New Year’s optimism, this encouragingly positive Outlook may be tied to media reports that the recession is over. Anxiety lingers over an unemployment rate that exceeds 9% (Spectrem Group research indicates that the majority of investors will consider the recession over when the unemployment level is less than 6%) and it remains to be seen if the President and the newly-seated Congress can effectively work together on economic issues. But there seems to be a general sense that the country begins 2011 on somewhat surer footing than it has in the years since the economic downturn.