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WAM Insights: Optimism About the US Economy Improves in June

July 3, 2020

Economic Outlook

The Phoenix Wealth & Affluent Monitor Economic Optimism trend line increases from 30% in May to 42% in June among Mass Affluent respondents, its highest level since the COVID-19 pandemic hit the US in March. In addition to a large improvement in optimism for Mass Affluent investors this month, pessimism among this audience also hits a four-month low, at 55% (versus 63% last month). Economic Optimism among HNW investors – with at least $1m+ household assets – remains relatively flat this month, but the percentage of HNW that are pessimistic declines for the second-straight month.

Investing Outlook

The Wealth & Affluent Monitor’s Investment Outlook – the percentage of affluent investors planning to increase their level of investments in the next three months – sees little change versus the prior month. The most frequent outcome for both HNW and Mass Affluent consumers is once again to make no changes to their investments and finances, which is the current plan for roughly 60% of each audience. 33% of Mass Affluent consumers are currently planning to increase their investments, up slightly from 29% in May, and reaching the highest level since March. Meanwhile, HNW investors continue to hold steady with their investments, as 61% plan no changes in the upcoming three months, a level not seen since September 2019. HNW consumers planning to increase their investments drops slightly this month to 31%, which marks four consecutive months of decline, though levels are still in line with most of 2019 – as early 2020 featured all-time high ratings.

Perspective

Despite the ongoing nationwide struggle with the Coronavirus pandemic, June’s results from the Phoenix Wealth & Affluent Monitor hint at the first positive news since the outbreak in March. With a significant increase in Economic Optimism among Mass Affluent consumers this month, it reflects the other encouraging trends in the country such as a recovering stock market and the hope of summer travel and re-opening of various businesses and industries. While Economic Optimism is still well below what pre-COVID levels had consistently been for either Mass Affluent or High Net Worth investors, higher general optimism and steady levels of increasing investments in June 2020 indicate that affluent consumers are beginning to feel and act more like they used to. Although this month’s results indicate a light at the end of the tunnel from COVID-19, it remains a long road ahead before these investors fully regain confidence and optimism about the US economy and their finances.

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