Upper-Income Americans Less Optimistic About Economy

Retailers may be celebrating tepid Black Friday results followed by solid Cyber Monday figures, but wealthy Americans are increasingly pessimistic about their finances, finds the Discover U.S. Spending Monitor.

The monthly survey asks a random sampling of 15,000 people about their attitudes of the economy. Overall in November, 59 percent of consumers rated the economy as poor. But for the first time since July, it was the upper-income families that posted the highest percent change, jumping from 46.5 percent rating the economy as poor in October, to 55 percent rating the economy as poor in last month.

“November marked the first time in 26 years the unemployment rate reached double digits, and while some economic reports have stated the economy is getting better, a majority of upper-income consumers tend to disagree,” says Julie Loeger, senior vice president of brand and product management for Discover.

Middle- and upper-income households are the most closely watched this holiday season because they're typically considered to have more discretionary income to spend on luxury items, such as gifts. But heading into Black Friday, 57 percent of upper-income earners said they were planning to spend less on presents, in line with what retailers experienced. ShopperTrak reported that Black Friday spending rose a mere 0.5 percent.

Online sales posted robust year-over-year increases, starting with a rise of 11 percent in online orders on Black Friday and an additional 24.1 percent spike on Cyber Monday, according to Coremetrics.

Pressure to hold down costs is the main reason more shoppers are going online, John Challenger, CEO of outplacement firm Challenger Gray & Christmas tells Portfolio.com. “Recessions often accelerate longer-term trends in economic behaviors, and the monetary pressure people are feeling is sending them to e-tailers because they can save not only on products but also on fundamentals, such as gas costs to get to the stores,” he adds.

Still, “in the midst of the holiday season, consumers of all income levels are uncertain about the direction of the economy and where it may be headed,” Loeger says “Unfortunately, this uncertainty has consumers hard-pressed to help retailers boost their holiday sales.”