Confidence among American households earning more than $100,000 climbed last week to the highest level in more than two years just as the Standard & Poor’s 500 Index set a new record, the Bloomberg Consumer Comfort Index showed today.
The gauge for the top earners rose to 12.6, its highest since October 2010. The seven-point jump from the previous week was the biggest since the end of September.
The S&P 500 set a closing record of 1,570.25 on April 2. It eclipsed that mark yesterday, putting the all-time high at 1,587.73.
Will the gains continue to lift sentiment in coming weeks or will President Barack Obama’s latest budget proposal trigger a setback? The administration’s 2014 budget proposals yesterday included boosting taxes on top earners, estates and private-equity managers.
The more well-off are probably also responding to the pickup in wealth propelled by a housing rebound. Home prices rose 10.2 percent in the 12 months through February, the biggest increase in almost seven years, according to CoreLogic Inc.
Rising stocks and property values aren’t floating all boats. The gains among the highest paid contrast with declines at the other end of the income spectrum. Households earning less than $15,000 were the most pessimistic last week in three months. Their gauge dropped 10.8 points to minus 60.3, the lowest reading since Jan. 13. Confidence among the unemployed fell to its lowest level in five months.
There was also a regional bias to underlying changes in sentiment. Southerners were the most upbeat since late October, while those living in the West were the most pessimistic since September.
The crosscurrents left the overall confidence measure little changed last week at minus 34 compared to minus 34.1 in the previous seven days. The Bloomberg Consumer Comfort Index has held within a 0.5-point range for the past month.