Non-Millionaire Concerns about the Economy Halt Outlook Rise

Millionaire households’ renewed confidence in the economy was not enough to stem a decline in the overall Spectrem Affluent Household Outlook. After reaching its highest level since July 2007 last month, it fell from 23.2% to 18.3%. This is, however, a level the Outlook had not achieved since September 2007 when it rose to 20.6%.
There were decreases in each of the overall Outlook components, which are based on investor attitudes regarding issues that impact their daily lives. The steepest drop was the Economy, which fell from 39.3% to 25.2%. Household Income fell from 15.6% to 11.6%, while household assets decreased 21.6% to 20.8%. Company health also declined from 16.4% to 15.6%.
A comparison between Millionaires and Non-Millionaires reveals starkly different views this month on the direction of the economy. The overall Millionaire Outlook was 32.5%, its highest reading since April 2007 at 38.3%. Household Income was at 23.3% and Household Assets at 35%. Company Health was at 29.2% and the Economy at 42.5%, a nearly seven-year high.
The overall Non-Millionaire Outlook, on the other hand, decreased to 3.7% from 22.5% last month. Their attitude toward the Economy dropped precipitously from 44% last month to 10.3%. Household Income was -1.9% from 16.5 in January. Household Assets 5.6%, a decrease over last month’s 10%. Company Health declined from 13.8% last month to 0.9%.
A look at past years shows that decreases in Non-Millionaire attitudes toward the Economy are common between January and February, perhaps a lingering holiday spending hangover. But Non-Millionaires also continue to be most concerned about a prolonged economic downturn. Though there have been encouraging signs of a recovery, recent forecasts that the federal deficit will reach $1.5 trillion, plays to some of their biggest fears.