Yahoo Finance Young Americans are driving economic optimism: Morning Brief
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Consumer feelings about the US economy continue to improve.
Data from The Conference Board published Tuesday showed confidence reaching a two-year high in July. And this reading followed data from the University of Michigan earlier this month that showed consumer sentiment reaching the highest since September 2021.
And this latest bump is being driven by America's youngest consumers.
According to The Conference Board's latest figures, Americans under 35 haven't felt this good about the economy since June 2021. This month's reading of 132.6 is also the third-highest reading for this cohort since the start of 2020.
"Consumers have had a lot to deal with over the past few years, but their take on how things are going at the moment is as good as it has been since the initial onset of the pandemic," wrote Wells Fargo economists Tim Quinlan and Jeremiah Kohl in a note on Tuesday.
Now, this relative enthusiasm about the economy from younger Americans is in keeping with what The Conference Board's data shows over time — when it comes to youthful enthusiasm, the economy seems to have it.
Moreover, coming out of the pandemic younger consumers are more likely to have resumed a wider range of activities more quickly.
Add in a stock market bubble fueled by meme stocks and cryptocurrencies being traded on people's phones and all the ingredients were present for a boom in how young people thought about their economic prospects.
Younger consumers driving economic optimism also shapes how investors might think about these trends, as noted by LPL Research analyst Kent Cullinane on Tuesday.
"Spending habits among the two cohorts also differs considerably," Cullinane wrote, "as the younger demographic tends to spend more on rent, mortgage interest, jewelry, and infant accessories, while the older demographic spends more on financial services, entertainment, food at home, nursing home care, and prescription drugs."
Known divergences, perhaps, but the economy is ultimately shaped on the margins. And seemingly small splits in how groups see their financial situation can result in surprising outcomes for the companies that sit on the leading edges of these changes.
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