Are economic conditions in America good, improving, declining, disastrous?
Government indicators would suggest economic conditions are great. Jobs numbers and unemployment numbers are improving and interest rates are steady. But corporate reports are mixed, as retailers continue to struggle, and any company with a significant stake in international trade are wondering how global negotiations are going to impact their bottom line.
But optimists are going to see the positive and haters are going to hate. Spectrem’s Household Outlook includes all kinds of investors, and it is a solid indicator of the overall outlook of American investors. In May, the Outlook was slightly better than in April, and much better than in January, but not as good as it was a year ago.
The Spectrem Household Outlook measures an investor’s optimism about four financial components in their daily lives, including Household Income, Household Assets, and the Economy. For May, the overall Outlook registered at 22.80, a notable rise from the 21.20 recorded in April. That is the fourth month in which the Outlook has been above 20 overall.
For comparison, the Outlook spent four months, from October 2018 to January 2019, under 20 and as low as 10.90 in January following that horrible December for the stock market. However, prior to October of 2018, the Spectrem Household Outlook was between 22.90 and 40 for 15 months, back to July of 2017.
So May’s Outlook is better than it was, but also not as good as it was.
Among all investors, the Outlook for individual components was slightly better, although Household Income was steady from the previous month. Notably, the Outlook for the economy rose from 1.20 to 3.60 after spending five months in negative territory.
Here is a look at the outlook regarding each component:
3.60, up from 1.20 in April.
- Those five months when the economy rating was in negative range, the overall Outlook suffered as well. Three months in positive territory is better, but it was at 23.20 back in August of 2018.
- In an unusual turn, the registered Outlook for the economy among non-Millionaires in May was higher than among Millionaires, 5.26 to 2.21. That rarely occurs. In similar fashion, the Outlook for the economy among retired investors was higher than that among working investors (10.75 to -5.43).
48.40, up more than 3 points from 45.20 in April.
- The Outlook for Household Assets is fairly positive overall, and has been above 40 for four months. This is a category that does not see a lot of movement, but was unusually high among Millionaires at 57.35. Among non-Millionaires, the rating was 37.72, the lowest mark in four months.
- However, among retired investors, the Outlook for Household Assets was the highest of the year at 39.78, a good sign for investors for whom Household Assets is probably the most important category in the Outlook.
25.20, with no movement from the 25.20 in April.
- The Outlook for Household Income rarely reaches 30, and does not fluctuate much, but but is in much better shape that it was back in January when the Outlook reflected the desperate times from December’s bad month for the markets.
- Based on different investor segments, Household Income rose significantly among Millionaires, from 21.90 to 35.29, but fell by nearly equal portion for non-Millionaires from 28.93 to 13.16. So May was a good month for the wealthier investors and equally bad for non-Millionaires as they considered their monthly income situation.
- Strongly affected by current conditions were female investors, who dropped their Outlook for Household Income from 30.23 in April to 13.41 in May.
14.00, up less than a point from 13.20 in April.
- This Outlook is very likely specific to the individual companies involved, as some companies are reporting positive earnings returns while consumer-targeted companies in retail have seen poor performances.
- Again, female investors reported poor Outlook for Company Health, dropping from 9.30 to 2.44. For investors who vote Democratic, the Outlook for Company Health fell from 7.14 into negative territory at -4.35.
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