Barry gets mad at me when I reference polls and surveys that ask people what they will do or what they just did. Because everyone lies at worst or at best they’ll give you an aspirational opinion of their future actions – “I’ll be going to the gym five nights this week” or “I plan to volunteer at an adult literacy workshop this spring.” Yeah, but you won’t.
It comes back to my old mantra: Watch What they Do, Not What They Say.
But! But it’s good to pay attention to these polls not as being predictive of the future but rather as being highly indicative of the present mood of those being asked the questions. Because in their own predictions about their future spending, they are likely extrapolating what they feel at this current moment.
This is doubly important now given that the only decent economic data is coming from the services and consumer side of the economy at the moment…
In a special study of 625 wealthy and affluent U.S. households, data collected from September 11-19th for the 2012 Survey of Affluence and Wealth in America, produced by American Express Publishing and Harrison Group, shows that America’s affluent consumers will focus on high-quality, luxury goods of “worth” during this year’s holiday gift-giving season, even as overall holiday gift spending decreases from last year.
According to the survey, gift giving will be down 3.4% from last year’s $68.63 billion. The top 10% will account for nearly 29% of the total 2012 holiday spend, and will increase their gift giving spend 21.9% this year over 2011. Conversely, the other 90% of households plan to spend 10.9% less this year.
Also, I found this little tidbit from the same poll rather interesting, in which the affluent surveyed are all like “We’re going to be fine, the rest of the nation…not so much.” This matters because it is largely the affluent that keep the new and small business hiring subdued as a result of this bunker mentality. Their attitude about the near- and intermediate term holds the key to getting the domestic economy up and out of the stall speed trap.
“The result is that we are seeing a gap in perception in terms of economic risk between the middle class and affluent,” said Dr. Taylor. “While 68% of the Top 1% report they are very happy and 74% feel they are successful in their personal lives, just 47% and 53%, respectively, of the general population feels the same way. This is certainly a product of differences in perception regarding the economy, job security and so on.”
Here is how the Harrison Group conducts this annual survey, btw:
About The Survey of Affluence and Wealth in America
Now in its seventh consecutive year, the Annual Survey of Affluence and Wealth in America, produced by American Express Publishing Corporation and Harrison Group, details the lives and lifestyles of Americans with at least $100,000 in annual discretionary income. Collectively, these households reflect the top 10% of the American financial elite, representing approximately 12 million households.
The three groups in the research – Upper middle class, which includes consumers with $100K to $149K in discretionary income (n=223); Core Affluent, that is, consumers with $150K in discretionary income to <$450K in household income (n=225); and Top 1%, those with $450K+ in household income (n=177) – were defined by discretionary spending: gross income reduced by factors representing property assets (mortgage, taxes). Discretionary household income was used to ensure that the sample represented individuals with a high propensity to spend. The September fielding represents a sup-group of respondents from the wider Survey of Affluence and Wealth in America, which interviews 3,600 consumers each year.