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New Survey Shows Affluent Have Hopeful Outlook— But Not Convinced Recession is Over

A new survey of the wealthiest 10% of US households by the American Affluence Research Center shows the affluent have a negative opinion of current business conditions, but have a positive 12 month outlook for improvements in business conditions and the stock market.

In the near term, the affluent have concerns regarding their personal household income. This is contributing to weakness in their plans for December holiday gift purchases, which they estimate will average about $2,400 or a 5% decline from what they spent in 2008. As an extension of this, spending plans over the next 12 months for 8 major items and 17 different categories of products and services continue to be soft though somewhat stronger than in the spring 2009 survey.

There are expected near term reductions in expenses such as purchases of primary residences, vacation homes, cruises, and motor vehicles. Also major home appliances, vacation travel, and designer apparel are expected to experience declines. The surveys also track changing investment objectives as the stock market rises and falls.

Conducted twice annually, the American Affluence Research Center survey provides insights into the concepts of the “new normal”, “stealth wealth”, and “luxury shame” that are contrary to the anecdotal examples appearing in recent media coverage of the luxury market.

Most affluent expect to return to pre-recession levels of spending once they are convinced the recession is over and they see a recovery in their net worth, which has been hit by declines in the value of their savings and their home. They do not expect to see the end of the recession, with real improvements in the rate of unemployment and the value of their savings and their homes, for about 18 to 24 months and possibly in to early 2012.