Growing U.S. inequality reflected in slumping consumer confidence
Stock markets closed at record highs again but consumers remain in a malaise, with expectations for the future trending away from their high levels at the start of 2020 and back toward the lows they plumbed in May, as the pandemic forced municipalities around the country to impose lockdown restrictions.
Driving the news: Friday's release of the University of Michigan's consumer sentiment index showed the overall index and consumer expectations index at their weakest level since September.
Between the lines: The entire decline in February's sentiment index was "concentrated in the expectation index and among households with incomes below $75,000," survey analysts said in a release.
- "Households with incomes in the bottom third reported significant setbacks in their current finances, with fewer of these households mentioning recent income gains than anytime since 2014."
The bottom line: "When asked to assess their current financial position, the deep divisions become apparent: among those with incomes in the bottom third, just 23% reported improved finances, the lowest since 2014; in contrast, among those with incomes in the top third, 54% reported their finances had improved.
- "Mentions of income gains fell to just 17% among those in the bottom third, compared with 44% in the top income third."
Go deeper: The winter COVID surge has reversed progress on economic inequality