Even though they’re still flush with cash from the booming market, wealthier people are increasingly worried about the economy, especially inflation.
What’s happening: In March, consumer confidence dropped 7.2% for those earning more than $100,000 — a much larger dip than for those earning less than $50,000, according to a measure of consumer sentiment released today as part of the Morning Consult/Axios Inequality Index.
Why it matters: High earners still feel better about the economy on average, but have more to lose from declining financial markets. So the mix of volatile asset prices, Federal Reserve rate hikes and a surge in inflation is walloping their confidence.
Between the lines: Financial assets have been particularly volatile since the start of the year.
- Wealthy people are more likely to be plugged into financial news and checking their 401k balances, said Jesse Wheeler, economic analyst at Morning Consult.
- They also tend to be older, and may remember living through inflation decades ago. “Young people don’t know, and they’ll soon find out.”
Of note: Wage growth has been highest among lower-paid workers, so many high-earning workers have seen their compensation falling when adjusted for inflation.
Reality check: Rich folks might be more stressed, but lower-income Americans have much more to fear from rising prices. They tend to have less financial cushion to handle higher prices for food, gas, and other necessities.
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