July 27, 2004 -- Noticing fewer Bentleys on the road these days? Despite being more optimistic about the economy than they've been in almost two years, affluent Americans are using their platinum cards a little more sparingly these days.
According to the latest Affluent Consumer Confidence Index, concerns about Iraq, rising energy costs, and a potential real estate bubble are causing a dip in spending and investing. And with the presidential campaign season in full swing, the vast majority of the nation's top earners are now citing the continuing problems in Iraq, and not the economy, as the issue most likely to affect the November election.
The most recent numbers from a poll conducted the first week of July show an overall confidence score of 61 out of a possible 100, up from 57 last quarter, and the highest since the survey began in January 2003. Of roughly 400 people surveyed nationwide, 72 percent said they believe the economy is moving in the right direction, a jump from 62 percent three months ago. They also viewed their personal financial situations as improving and agreed that "jobs are plentiful." Yet, spending has lagged slightly, according to the survey. Seven percent of respondents said they planned to buy luxury items, down from 11 percent in April.
The quarterly report, conducted by Cleveland-based McDonald Financial Group, measures market sentiment among those with personal annual income of $150,000 or more, or investable assets of $500,000 or more.
"Regularly surveying the nation's affluent population is important, as many of the affluent are business owners or serve in executive positions where they are responsible for making capital expenditure and hiring decisions," said David Legeay, a McDonald senior vice president. "As a result, their opinions can be an important barometer of where the economy is headed."