This morning's release of Consumer Confidence for the month of February showed that consumers were less optimistic about the current state of affairs than economists were expecting. In addition to the weaker than expected overall sentiment, this month's report also showed that consumers have soured a bit on the stock market.
In each month's Consumer Confidence survey, consumers are asked whether they expect stock prices to rise or fall. In this month's survey, 29.7% of respondents expect stock prices to rise while 33.1% expect stock prices to fall. This works out to a spread of negative 3.4%. This is the first time since October and only the third time since the start of 2013 that more people in the survey expect equity prices to fall than rise.
One trend that continued in this month's report was the wide disparity between confidence levels based on income. For Americans with incomes of more than $50K, confidence fell from 103.4 down to 99.3. For Americans with incomes of between $35K and $50K, however, confidence saw a sharp decline, falling from 75.2 down to 63.4. This 11.8 percentage point drop was the largest one month decline since January 2013, and it brought the spread between the two income ranges up to 35.9%, which is the second largest monthly spread on record dating back to 1987 (highest spread on record was 43.8 in August 2013).
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