William & Mary

Peter Atwater in the Financial Times

Please click here for the full story. Quoting John Authers from the Financial Times:

"As the always interesting Peter Atwater of Financial Insyghts points out, using data from Gallup, the confidence does not show up unambiguously when looking at actual spending patterns. As is clear, the amount that people report spending recently is as high as it has been in 10 years. The problem, as Peter analyses when digging into the numbers, is that when the data are broken down by income, poorer and middle­income families showed a sharp boost in spending from October to November, but no continued growth in December, a month which normally sees high spending. Confidence is higher but appears to need further confirmation. He also uses Gallup data on the jobs market to suggest a problem for sentiment there. This is Gallup’s index of 'good jobs' (full­time jobs of 30 hours or more per week). It is showing a year­ on­year decline for the first time in a while.The problem, he suggests, may be that the fixed costs of living have risen too much. 'While Detroit is now celebrating its record 2016 sales, auto­malls look even more vulnerable than fashion malls ahead. So, too, I am afraid do American college campuses. How American consumers choose to dishonour their supersized fixed expenses is the biggest, yet least appreciated, issue facing us. The financial tug of war between banks, landlords, hospitals and the government is going to be wild.'"