This morning's Consumer Confidence report for August came in considerably weaker than expected (60.6 vs. 66.0 estimate), posting the largest monthly decline since October. In spite of this month's decline, Consumer Confidence remains well above the levels we saw last Summer, keeping the uptrend off the February 2009 lows intact.
When looking at the monthly Consumer Confidence report, we also like to look at how sentiment breaks down based on income. Not surprisingly, Americans with higher incomes ($50K+) are more confident than Americans with lower incomes (<$50K). The chart below shows the rolling six-month average spread between confidence for higher income Americans relative to lower income Americans. As shown, even though we saw a slight drop this month the gap in confidence between rich and poor is close to record highs. With the Presidential election now just over two months away, it shouldn't be too much of a surprise that politicians at all levels are seizing on this widening gap in hopes of picking up extra votes.
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