- Michael Steele/Getty Images
Not all postelection confidence surges are created equal.
While The Conference Board’s consumer-confidence index reading surged to its highest level since 2000 on Tuesday, some groups have seen their confidence soar even more than others.
According to Joe LaVorgna, the chief US economist at Deutsche Bank, older Americans have seen the largest uptick in confidence since the election of President Donald Trump.
Typically, older Americans’ confidence lags well behind that of younger Americans. In fact, the underperformance of older Americans’ confidence was at a record high as recently as September. The turnaround, however, has been massive.
Because of that turnaround, LaVorgna also posited that American confidence as a whole was unlikely to be affected by the chaos surrounding the American Health Care Act, in which Republicans were unable to agree on a final version of their healthcare bill, even though stocks briefly fell after the height of the political turmoil.
For one thing, LaVorgna said, the AHCA was wildly unpopular and for another, older people had the most to lose from the AHCA’s changes to subsidies and care requirements.
“The age cohort that has seen the largest jump in confidence over the last five months has been those over 55 years of age,” the note said. “These are the individuals who arguably were most concerned about the AHCA. Therefore, its indefinite shelving is unlikely to meaningfully impinge upon confidence.”
- Deutsche Bank
More affluent Americans are the other group showing a big boost in confidence since the election.
According to a note from Bespoke Investment Group, the income group with the largest increase in confidence since Trump was elected was those making $50,000 annually or more, the group with the highest income in The Conference Board’s survey.
“Older consumers also tend to have higher incomes, and that’s driven higher income consumers towards an explosion of confidence,” Bespoke said. “We would note that lower income consumers are much less consistent in their positive sentiments, both on an absolute basis and in terms of recent patterns.”
- Bespoke Investment Group
While it is unclear whether these incredibly high confidence numbers will stick around, or whether the demographics that are outperforming will continue to do so, the shift is stunning.