There's a growing sentiment gap between rich and poor Americans
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Higher-earning Americans are feeling pretty good these days, but sentiment among those at the bottom is stagnating at much lower levels.
Why it matters: There's long been a gap like this between rich and poor —more money often means fewer problems. But this year the difference in sentiment between the top and bottom is at its widest since Morning Consult began tracking the data in 2018.
How it works: The research firm measures sentiment by asking adults how they feel about their own personal finances, business conditions overall, and if a major purchase is a good idea.
- They roll those answers into an index; any number above 100 indicates positive sentiment.
By the numbers: On July 21, the index for those earning more than $100,000 a year was at 122. That's nearly 33 points higher than sentiment among those earning less than $50,000.
- Since mid-June, the gap between rich and poor has been consistently greater than 30 points.
Zoom out: There's a few things driving the vibes apart.
📈 The stock market. The S&P 500 has bounced back — and then some — from its April "Liberation Day" lows.
- A rising 401(k) drives spirits higher. But the vast majority of low-income adults don't have money invested in stocks at all.
🏡 Home values. Higher house prices make homeowners feel great — a high Zestimate is a mood booster.
- That does nothing for renters, except make them feel increasingly locked out of the American dream.
👷♀️ The job market. While overall unemployment still seems low, lower-earning adults are increasingly reporting a loss of pay or income in Morning Consult's data, says chief economist John Leer.
The big picture: When consumers feel good, they spend money — and high-earners' spending drives the economy.
- Outlays by those in the top 20% account for 60% of spending overall in the U.S., per data from Moody's Analytics.
- "Investors are flocking into companies that can successfully sell to high income consumers," says Leer.
- Some policymakers are worried that strong top-line metrics are masking a lot of financial vulnerability, some of which could worsen as cuts to the safety net in the 'big, beautiful bill" start kicking in.
Yes, but: Even among the top earners, things aren't as rosy as they might first appear.
- "Despite more upbeat consumer confidence, particularly among the well-to-do, they are not spending with any gusto," Mark Zandi, chief economist at Moody's Analytics, tells Axios. Stock market volatility has made folks nervous about spending, he says.
- Spending growth among the top 20% has flatlined this year, after surging in 2023 and 2024, he says.
What to watch: The sentiment split could widen even further, as higher tariffs could wallop lower earners, who spend a larger share of their income on goods.
