Not all post-Trump election confidence surges are created equal.
While the Conference Board’s consumer confidence index reading surged to its highest level since 2000 on Tuesday, there are some groups that have seen their confidence soar even more than others.
According to Joe LaVorgna, 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 under-performance of older Americans’ confidence was at a record high as recently as September. The turnaround, however, has been massive.
LaVorgna also posited that average Americans’ confidence wouldn’t likely be affected by the chaos surrounding the American Health Care Act, with Republicans unable to agree on a final version of the healthcare overhaul, even though stocks briefly fell after the height of the political turmoil.
For one thing, said LaVorgna, 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,” said the note. “These are the individuals who arguably were most concerned about the AHCA. Therefore, its indefinite shelving is unlikely to meaningfully impinge upon confidence.”
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 $US50,000 annually or more, the highest income group 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,” said Bespoke. “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.”
While it is unclear whether these incredibly high confidence numbers will stick around, or if the demographics currently outperforming will continue to do so, the shift is stunning.