Despite a booming economy and tax cuts expected to help the well off, fewer than half of Affluent American consumers are optimistic that 2018 will be a good year for America as a whole.
For over 40 years, we have been surveying Affluent Americans (currently defined as adults age 18+ with household incomes over $125,000) and monitoring their attitudes and behaviors. In January of every year, we reach out to our respondents with an Outlook questionnaire designed to gauge their optimism in regards to the future. This year the responses were the most polarized, conflicted, and fascinating we’ve seen.
High marks for the economy, low marks for America
The Outlook was fielded among 803 affluent respondents Jan. 3 - 16, after a year of meteoric stock market gains and shortly after a tax bill with acknowledged benefits for businesses and high-earners was signed into law. As a result, it’s hardly surprising that Affluent Americans indicated that 2017 was the best year for the economy since the Outlook was launched seven years ago. Two-thirds of Affluents agreed that 2017 was a good year for the U.S. economy and almost 70% reported that it was a good year for their own career and/or finances.
Higher marks for the economy generally lead to greater confidence in the direction of the country as a whole. However, while Affluents reported that 2017 was an excellent year for their families and their wallets, only 38% said it was a good year for America. Almost half (48%) told us that the country remains on the wrong track, while only 44% believe the U.S. is headed in the right direction. Asked to explain their opinions, those who claimed America is on the right track are more likely to use the words “stock market,” “economy” and “unemployment.” For those who believe we’re headed in the wrong direction, the most commonly used words are “president” and “Trump.”
Perhaps ironically, the Affluents with the highest household incomes are the least likely to feel confident that American is on the right track, with 59% of those with incomes over $250,000 saying the country is headed in the wrong direction. However, net worth shows an inverse relationship. People with over $2 million net worth, who tend to be older, are more likely to say the country is on the right track than wrong.
Nevertheless, the rising economic tide does appear to be having a mitigating impact on the perceptions of affluent Americans across the board. The percentage of respondents saying the country is on the right track has edged up nine points since the beginning of 2017 and six points in the last quarter alone. While the number of Affluents who believe America is on the wrong track has remained consistent, the percentage of those who “don’t know” has decreased from 20% to 9% over the past 12 months. Open-ended responses indicate that economic factors have played a large role in convincing those on the fence that America is moving in the right direction.
In 2018, Affluents are optimistic for themselves, less so for the country
The vast majority of Affluents believe that 2018 will be a good year—for them, their families and their finances. In fact, 78% of Affluents say they and their families will do well in the next 12 months. Three-quarters of the audience think their careers and/or finances will benefit. Yet, their outlook for the economy isn’t as unambiguously rosy. Regardless of the stock market’s stellar performance in 2017, 56% of Affluents believe 2018 will be a good year for the U.S. economy, and only 46% believe it will be a good year for America as a whole.
The divide between personal and national is even wider for Millennials
While over half of men age 35+ say the U.S. is on the right track, younger people and women are far less confident. Though 44% of total Affluents claim the country is headed in the right direction, only 35% of affluent Millennials agree. Millennials’s opinion of 2017 is by far the dimmest of all generations, with only 25% saying the year was a good one for America as a whole, despite the fact that 72% claim 2017 was a good year for their personal career and/or finances.
Looking forward, 84% of Millennials think 2018 will be a good year for their personal finances and 60% say they’re at least cautiously optimistic about the economy going forward. Yet compared to other generations, they are more pessimistic overall—with only 46% saying they believe it is likely to be a good year for the U.S. economy, compared to 60% of Gen Xers, Boomers and Seniors. When it comes to America as a whole, 44% of Millennials believe it will be a good year, in line with other generations.
The gender gap is profound across all age groups
In general, Affluent women possess a far less positive view of the past 12 months. Only 30% of women told us that 2017 was a good year for America as a whole—compared to 45% of men. Surprisingly, the disparity is most pronounced among Affluents over 50, with 32% of senior women saying 2017 was a good year for the country, versus 55% of men the same age.
Women are less likely to report that their careers, finances and families prospered in 2017. And while 77% of men claim it was a good year for the U.S. economy, only 55% of women agree. Women are overwhelmingly optimistic about their personal lives and finances in 2018, but their expectations for the U.S. economy haven’t kept pace, with only 51% saying they’re optimistic, versus 62% of men. The majority of Affluent women are unhappy with the direction the country is heading, with only 38% of women saying the country is heading in the right direction, versus 49% of men.
Interestingly, in April 2016, seven months before the election, more men than women believed the country was on the wrong track. This has steadily changed over the past eight quarters, and today the positions are completely reversed.
It’s likely that multiple factors—from the president’s policies to the #MeToo movement—account for Affluent women’s significantly darker perspective. In any event, this is no niche audience. Affluent American women are a large and powerful voting block, and their dissatisfaction should not be overlooked or ignored.
Affluent Americans are optimistic but polarized
Over the past two years, much has been made of the political polarization of the American public. Our Outlook has shown that this polarization extends even to the Affluent Americans, who might be perceived as relatively homogenous. Affluent women and Millennials are more likely to be dissatisfied with the direction that the country is taking—and less optimistic about the future of the economy. However, when it comes to their personal lives and finances, all Affluents are overwhelmingly optimistic, and there is evidence that the strong economy is having a positive impact on overall perceptions.