The Wall Street Journal says that the middle class becomes pessimistic about the economy:
The middle class – considered as households that earn around $ 53,000 to $ 161,000 a year – plays a major role in that decreasing optimism. After months of following the increasing trust of high incomes about the economy, households who between $ 50,000 and $ 100,000 earned an abrupt reversed face in June. They now look more like the gloomy views of low incomes, according to surveys from Morning Consult, a data intelligence company.
Here is a graph that breaks down sentiment at the income levels:
You can bicker with their definition of middle class, but the thing that strikes me is how fleeting these figures are. Sentiment crashes higher than higher than crashes again.
I’m not sure if we can trust these surveys more.
Here there is one of the Wsj That asks people if they have a good chance of improving their standard of living:
The article says that people are losing confidence in the idea that they can get ahead through hard work.
Maybe things are more difficult today than in the past. In some respects they are probably. Things are much easier in other ways.
But look at the trend in this survey in the course of time. It went downhill … and then Covid and it crashed. I argue a combination of social media and our collective experience during the Pandemie broke the vibes forever. We can no longer trust these sentiment indicators. They are way too noisy.
Two Stanford researchers have a model that looks at how the economy performs compared to the perception of the economy through sentiment values. The two followed closely. No more:
This comes from the story:
“The gap is amazing,” Mahoney said about the separation of sentiment of the solid economic statistics. A factor that the gap recently feeds, he said, has been the belly of the stock market – “who has translated into a stronger sentiment in the past. But not on this occasion.”
You have to see what people don’t do what they say. People say many things on the internet that do not match reality.
Roger Lowenstein wrote an OP-ED in the Magazine About American exceptionality. He says that last year one in 24 household recorded a new business request. You don’t start new things when you are worried about the future or the hard work.
Look at this graph:
New business applications have exploded since the pandemic while sentiment has fallen on the ground.
What should we trust more – the feelings of people or their actions?
Suck Shows the number of households that have shares continues to rise:
The increase in the 2020s has been considerable and now went from 55% in 2019 to 62%. Would more people invest in the stock market if they thought it was going downhill from here?
People say they are pessimistic about the future. Their actions do not match their words.
Do not trust the vibes. They are broken.
Maybe forever.
Michael and I talked about Seniment lectures, American exceptionalness and much more about this week’s video of Animal Spirits:
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The news makes you miserable
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