Columnist

Nearly nine years into one of the longest economic expansions on record, consumers are unusually optimistic. Another thing that’s highly unusual about today’s consumer optimism, besides its overall level: For at least fleeting moments, older people have been more optimistic than the young.

That almost never happens.

Take the University of Michigan’s consumer sentiment index. In February, consumers older than 55 exhibited more optimism than did those younger than 35. This is the first and only time in the index’s 40-year history that this has been true.

Here’s a chart showing the difference in consumer sentiment. You can see it turn negative in February 2018 (meaning younger people are less optimistic than older ones):


Source: University of Michigan, Survey of Consumers.

Young people again took the lead in March, but it’s still odd that the two age groups are that close in optimism at all. This appears to be driven partly by a decline in consumer sentiment among the young, and partly by a rise in consumer sentiment among older people. Here are the readings for the two age groups shown separately:


Source: University of Michigan, Survey of Consumers.

“The younger generation seems to have leveled off after declining from a peak in late 2014/early 2015,” says Torsten Slok, chief international economist at Deutsche Bank. “The older have generally been trending upwards, but there was a particularly large spike up for this group that coincides with the 2016 election.”

A separate measure of consumer optimism, the Conference Board’s consumer confidence index, also registered a similar blip.

It showed that in March, consumers older than 55 exhibited more confidence in the economy than did those younger than 35. This was only the fourth time in the index’s nearly four-decade-long history that this was the case. The last time it happened was November 2000.


Source: Conference Board Consumer Confidence Survey, via Haver Analytics.

In this series, older consumers have gotten considerably more confident in the past year; the reading for younger people has bounced around but not generally improved on net during that time.


Source: Conference Board Consumer Confidence Survey, via Haver Analytics.

How to explain these anomalous readings?

They might just be statistical noise, of course. We’ll have to see what happens in the months ahead. But one interpretation is that older people are more enthusiastic about economic policy changes that have happened under President Trump. They’re more likely to be Republican, after all; are more supportive of the GOP’s recent tax overhaul; and are less likely to be affected by the GOP’s proposed cuts to (future) entitlement spending and the safety net.