Bloomberg and the Los Angeles Times have a new poll out talking about consumer confidence in the economy. The article points out a few interesting things about how people are feeling out there, and it is pretty pessimistic. The tail often wags the dog on these types of things, so the presence of the article is probably more important than the actual numbers.
Six in 10 who were surveyed predicted a recession, similar to the 64 percent who anticipated the economy would contract in a December 2000 poll by the Los Angeles Times three months before the last decline. In the current survey, 71 percent of those earning less than $40,000 said they expect a recession compared with about half for those making more than $100,000.
Those in high income brackets feel better about the chance of a recession? The disparity when broken down by wage class is significant (~21%). There is a much bigger narrative here. Some more detail would be need to get to the heart of this, but I suspect it has something to do with the upper income earners ability to shield themselves from inflationary and recession pressures.
A few other interesting things to note from the article.
“People tend to be pretty optimistic about their own situation, but when it comes to the larger economy they’re much more pessimistic,” said Karlyn Bowman, a polling expert at the American Enterprise Institute in Washington. Sixty-four percent of those polled said their own finances are very or fairly secure compared with 35 percent who described them as shaky.
People generally live in a dream world. Their personal situation is never (in their minds) as bad as it actually is, and everyone else’s is always worst than it actually is. The realization than one is loaded with debt and about two steps away from losing it all generally requires one to change. People don’t like to change. It is easier to wait from the foreclosures and bankruptcies.