Jul 27, 2022 - Economy

Economy vibes depend on how much you're earning

Consumer sentiment index, by household income
Data: Morning Consult; Chart: Erin Davis/Axios Visuals

You've heard of income inequality and wealth inequality. Well, there's also mood inequality.

The big picture: For the lowest earning households, consumer sentiment worsened in July, according to data out Wednesday morning from the Morning Consult/Axios Inequality Index. However, sentiment improved for those with more money, the survey showed.

  • Consumer sentiment fell 2.7% in households with annual incomes of less than $50,000 a year; while confidence among those earning more than $100,000 ticked up by 1%.

What's happening: Higher earners' got a mood boost as the stock market improved in July; but for those at the bottom, inflation is making it harder to afford the basics, said Jesse Wheeler, an economic analyst at Morning Consult.

  • High-income Americans have more flexibility to deal with inflation. You can put off big-ticket purchases, switch brands you buy or shops you frequent: That doesn't cut it for those living on tight budgets with less fat to trim.
  • As people stretch to afford stuff, credit card balances are going up. The share of adults with unpaid credit card balances has been steadily rising this year, especially for lower earners, according to a separate Morning Consult report.
  • "Inflation's tough for everyone, but it's harder at the bottom," said Wheeler.
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