Uncertainty looms around Iraq, deficit, housing bubble
Economic confidence among affluent Americans regarding the overall state of the economy rose seven points this quarter, following a significant, 13-point decline last quarter during the 2004 election season, according to the latest quarterly McDonald Financial Group Affluent Consumer Confidence Index results, released today. This represents one of the largest quarter-to-quarter increases in two years.
The overall score for the January McDonald Financial Group Affluent Consumer Confidence Index was 55 out of 100 – a seven-point (or 15 percent) increase since the last survey in October (48). The increase in affluent consumer confidence this quarter returns the Index to a similar level as one year ago (56 in January 2004).
As a result of their positive feelings about today's economy, affluent respondents say they plan to increase their spending and investing levels over the next quarter, with 30 percent of affluent Americans saying they would put more money in the stock market over the next three months. Thirty-two percent of business leaders polled say they plan to increase hiring levels over the next three months, a 15-point increase from last quarter. However, while the current picture appears quite positive, affluent consumers still have concerns about the future of the economy due to a number of issues facing the country such as Iraq, a perceived real estate bubble and the national deficit.
David Legeay, senior vice president, McDonald Financial Group, said, "We found that confidence among the affluent severely declined during the presidential election period as debates among the candidates brought issues like jobs and the economy to the forefront. Now, with the election decided, solid GDP growth and stock market gains in the last quarter of 2004, affluent Americans again appear to be very confident about the current state of the economy. Unlike previous quarters, when confidence has not necessarily translated into higher spending and investing intentions, in this quarter larger numbers of affluent Americans say they both feel more confident and plan to take action."