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- Upper-income earners are displaying behaviors that suggest they are adopting a defensive posture. On the one hand, their outlook score ticked up in January and is now back above neutral. But spending intent has fallen (as we predicted it might after the holidays). This spending-intent decline coincides with a big drop in intent to use debt and a large uptick in intent to save.
- To be clear, our data does not signal a spending collapse. Upper-income spending intent is still well above neutral (at 100). But to see such caution in the face of the continuing record highs in the markets is atypical. In fact, over the last six months as markets have hit these record highs, the upper-income outlook score has been in a trend range of broad decline (see blue channel above).
- Taken together, our data indicates that upper-income earners feel neutral to positive about their investments but are growing less enthusiastic about spending, planning to use less debt, and planning to save more. We characterize this as a shift into a defensive posture.
Bain and Dynata created the Consumer Health Indexes in 2017 to support business decision makers in their near- and midterm planning for their businesses. To achieve this, we have been asking questions that are within the expertise of the people taking our surveys. What are their personal spending plans? What are their saving plans? What is their use-of-debt plan? These are direct, easily understandable questions about survey respondents’ near-term expected behaviors. They require little interpretation, macroeconomic expertise, or filtering through the lens of the political or news cycle. Since 2017, our clients have been using our Consumer Health Indexes as a differentiated data point relative to existing confidence indicators.
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