economy

Rich People, Republicans Much Happier Now That Stocks Are Back At Records

"Nearly all of the early December gain was among upper income households".

In case the market needed a little extra “Goldilocks” magic headed into the weekend after the blockbuster November jobs report, the initial read on University of Michigan sentiment beat estimates and inflation expectations remained subdued.

The preliminary read on the headline index is 99.2 for December, well ahead of the 97 consensus was looking for, and near the top end of the range. Both the current and expectations gauges rose (115.2 from 111.6 and 88.9 from 87.3, respectively).

The August plunge to a Trump-era nadir is now a distant memory.

The “Goldilocks” bit comes courtesy of a decline in both short-term and longer-term inflation expectations, which fell to 2.4% and 2.3%, respectively, from 2.5% last month.

If you’re wondering who, exactly, is feeling better about things, it’s rich people.

“Nearly all of the early December gain was among upper income households, who also reported near record gains in household wealth, largely due to increased stock prices”, the survey’s chief economist Richard Curtin said.

“Indeed, among households with incomes in the top third of the distribution, their overall assessment of their current finances was the third highest in the past twenty years”, Curtin added, noting that the “gains were aided by declining inflation expectations, with long term inflation expectations returning to an all-time low”.

That’s what happens when the assets concentrated in the hands of the richest Americans push to new record highs.

In the same vein, Republicans are pretty pleased with how things are going – Democrats, not so much.

“While impeachment has dominated the media, virtually no consumer spontaneously mentioned impeachment in response to any question in early December–just 1%”, Curtin went on to say Friday, before noting that despite the seeming lack of interest in the Beltway drama, “the data indicate the strong impact of partisanship on economic expectations, which has widened in the past few months”.

The average gap between Democrats and Republicans was just 18.7 points during the Obama administration.

Under Trump, it’s more than doubled, to 41.6 points.


 

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