Lower-Income Americans Drive Consumer Sentiment to 14-Year High
America’s low-income earners boosted consumer sentiment to a 14-year high this month, while confidence among the nation’s highest earning workers fell.
The University of Michigan on Thursday said its consumer-sentiment index was 101.4 in March, down from an initial 102.0 reading for the month. The original and updated figure for March are both the highest levels since 2004. Economists surveyed by The Wall Street Journal had expected the final reading to remain at 102.0.
The index was 99.7 in February, the second-highest reading since 2004.
March’s gain from February was largely driven by lower-income households’ rising optimism, signaling that the U.S.’s tight labor market, which is pulling workers from the sidelines and pushing up wages in pockets of the country, could be making consumers giddy.
“All of the March gain in the Sentiment Index was among households with incomes in the bottom third… those in the middle third were unchanged, while the Index fell among households in the top third,” said Richard Curtin, the Michigan survey’s chief economist.
Meanwhile, some of the country’s highest earners expressed concerns with current economic policies, including the Trump administration’s recent tariff announcements. This offset positive reactions to the late-2017 tax overhaul among this higher income group.
Overall, measures of how consumers feel about the economy have climbed since President Donald Trump was elected and have been buoyed by strong economic growth, low unemployment and rising wealth related to home prices and repeated stock-market highs.
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