Key insights
- Jefferies reports a divergence in consumer sentiment, with higher-income and more-educated Americans showing improved sentiment linked to equity market gains. Overall sentiment declined due to concerns about energy prices and geopolitics. Improving labor market conditions, particularly among younger demographics, and stabilized pay losses offer a slightly bullish signal for consumer spending and equity market support.
Investing.com -- Higher-income and more-educated Americans reported improving sentiment in recent weeks, possibly driven by equity market gains and lower sensitivity to gasoline prices, according to Jefferies.
Overall consumer sentiment fell to 88 in the latest data, down from 94 at the end of February and 100 a year ago. The decline was driven by lower readings across current conditions, expectations for personal finances, buying conditions, and business conditions.
Current buying conditions and expected business conditions faced the most pressure, which Jefferies attributed to elevated energy prices and the current geopolitical climate.
However, consumers with a Master's degree or higher saw sentiment rise approximately 7 points from the March low, returning to late February levels. Higher-income consumers posted a 5-point increase from the March low, potentially due to improved securities market conditions.
The labor market showed improvement, with consumers reporting better hiring conditions. The unemployment index, which had moved above neutral, has now fallen back below that threshold.
The 18-24 and 25-34 age groups reported significant improvements in labor market conditions over the past month. Education and regional cohorts also showed broad-based improvement.
The proportion of workers reporting loss of pay stabilized at approximately 12%, an improvement from the post-holiday period and in line with early December levels.