PRINCETON, NJ -- Gallup's Consumer Mood Index among upper-income Americans worsened in February, continuing a general downward trend evident during the last year, while among lower-income consumers, the Index remained unchanged. As a result, upper-income consumers -- who were much more optimistic than their lower-income counterparts a year ago -- have now reversed positions with them.
Gap in Outlook Between Upper- and Lower-Income Americans Grew in February
In February of this year, 72% of lower-income consumers said the economy was getting worse -- slightly better than the 74% of January and an improvement over the 79% of February 2008. In sharp contrast, 84% of upper-income Americans said the economy was getting worse -- a deterioration from the 80% of January as well as the 79% of a year ago.
The greater pessimism that is evident now among upper-income Americans, compared to those with lower incomes, continues a trend that began to emerge last year. From February through May 2008, surging gas prices worsened the consumer mood -- particularly among lower-income Americans. Despite declining gas prices in the early fall, the financial crisis further depressed the consumer mood -- particularly among upper-income Americans. By December, the mood of the two consumer groups was equally negative. Both groups' mood improved a little in January, before upper-income Americans (but not those with lower incomes) became more negative in February.
The sharp decline in the mood of upper-income consumers over the past six months is not surprising, nor is the way it has worsened relative to the mood of lower-income Americans. Sharply falling housing prices and stock values have had a disproportionate impact on those in the upper-income group, while continuing job losses are depressing the mood of all Americans.
In this regard, it seems as though recent government efforts to extend the social safety net and assist homeowners in distress may represent more of a response to last year's decrease in the lower-income consumer mood than to the decrease among all income groups. At this point, it is not clear whether this is because of a lag in the ability of economic policy-making to adjust to the rapidly changing economy of 2009, or the result of an underlying economic ideology. Gallup Poll Daily monitoring of the consumer mood is likely to provide insight into this situation over the weeks ahead.
Gallup's Consumer Mood Index is based on aggregated interviews with a nationally representative sample of approximately 15,000 adults, aged 18 or older, each month. For results based on these samples, the maximum margin of sampling error is ±1 percentage point.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.