The economic data remains generally dismal, with a shrinking U.S. gross domestic product in the third quarter, a record low reading in the Conference Board’s Consumer Confidence Index, and a steep decline in the most recent Bloomberg Euro-Zone Retail Purchasing Managers’ Index. Yet the good thing about down cycles is that they reach a trough, and the latest research from the American Affluence Research Center suggests that the bottom of the economic downturn may be in sight.
The center’s twice-yearly Affluent Consumer Expectations 12-Month Outlook Index rose 11 points to 113 in October, driven by a 24-point jump in future business conditions to 123 and a 19-point rise in the stock market index to 124. Under the survey’s methodology, a reading of 100 points is considered neutral. Expectations for household income slid nine points to 93. As for spending for products and services over the next 12 months, indices rose for nine categories, fell for seven, and were unchanged for one. “In all 17 categories, at least two-thirds said they would spend the same or more as they did during the prior 12 months.”
Survey participants represent the wealthiest 10 percent of U.S. households, or “over a third of gross domestic product.” They average $304,000 of annual income, $3.1 million of net worth, and $1.6 million of investable assets.