Traders Peter Tuchman, left, and Patrick Casey work on the floor of the New York Stock Exchange on Feb. 8. (Richard Drew/AP)

Another brutal day in Lower Manhattan as the Dow Jones industrial average closed down nearly 3 percent and the Standard & Poor’s index closed down 2.5 percent.

At this point in 2017, stocks were up about 5 percent for the year; they’d continue to soar over the course of 2017 until the S&P closed up about 20 percent and the Dow up 25.

As of the market close on Thursday, the Dow is down 3 percent for the year and the S&P down 1 percent.


There was precisely one day in 2017 when either the Dow or the S&P was down for the year: The Dow was down 0.2 percent for the year at market close the day before President Trump was inaugurated.

The collapse on Thursday was a function of the administration’s announcement that it was imposing new sanctions on the Chinese government. But the timing of that announcement and of the markets’ slide was interesting, given data from the Pew Research Center released shortly before the tariffs announcement.

Confidence in the economy is soaring, hitting its highest point in Pew’s tracking since 2000. That is, in large part, a function of spiking confidence among Republicans, who now view the economy as positively as they did at the tail end of the boom in the 1990s.


A bit further down in Pew’s report, though, was an interesting detail. Americans of every income range view things such as the cost of health care and the prices of food and consumer goods as affecting their household incomes. But only those making $75,000 a year or more worry about stock prices as something that will affect their household finances.

In other words, 2018’s stock volatility should be more worrisome to the wealthy than to the poor.


Why do the wealthy see stock prices as more important to their household budgets? Well, quite simply, because they own more stock. Our Chris Ingraham assessed stock ownership by wealth percentile last year and found the distribution heavily weighted to wealthier Americans.


That is wealth, as opposed to income, and stock ownership contributes to household wealth. But the Federal Reserve indicates that only 14 percent of Americans own individual stocks and that only 52 percent have any sort of retirement account, including 401(k)s. Many Americans don’t participate in the market at all. So they probably don’t see it affecting their household finances much.

There is an interesting additional finding in that Pew analysis. Poorer households are more likely to say that the federal budget deficit affects their household finances. Why? Perhaps because lower-income households are more dependent on government programs. It is hard to say.

For those worried about the deficit, some bad news: It continues to grow. The annual deficit contributes to the federal debt, which, under Trump, has hit $21 trillion for the first time. It was just shy of $20 trillion when he took office, meaning that it has gone up more than 5 percent since then.

We can look at it the same way we looked at the stock price changes. The debt is up almost as much this year as it was in all of 2017. (The lulls in debt increases correlate to periods before the debt limit was raised.)


This isn’t the deficit, but it gets at the same point: The government is spending a lot of money.

Poorer households are also more worried about food prices and the availability of jobs. On Thursday, General Mills announced that it was raising prices to help combat inflation, a potentially worrisome development down the road. But job availability — as Trump would be the first to point out — is high. The economy added 313,000 jobs in February, and unemployment remains at recent lows.


The good news for those wealthy Americans worried about stock prices is that stock prices are much more volatile than, say, employment. When prices plunged in February, they quickly gained back much of their value. Excluding the dip last month, the Dow Jones hasn’t been this low since … Nov. 29.

No wonder economic confidence hasn’t taken much of a hit.

Scott Clement contributed to this report.