Economics
Morgan Stanley Sees a Red Flag in Concentrated Confidence Boom
- Sentiment increase seen driven by middle-income Republicans
- Lack of broad-based gain could weigh on consumer spending
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The middle class is quite confident in the U.S. economy. But everyone else is less so. And that could be a big problem for consumer spending, says Morgan Stanley.
“Confidence among middle-income households has risen more than 30 points since the election, while nearly all other income groups have experienced a single-digit rise,” Ellen Zentner, Morgan Stanley’s chief U.S. economist, wrote in a note Thursday. “Data also show a 40-point divergence between sentiment among Democrats and Republicans.”