Consumer confidence numbers indicate the health of the US economy; swings are predictors of consumer demand. The media hype the numbers (especially declining confidence) to make good headlines. Businesses react by adjusting inventory levels and plans to hire or fire employees to control operation costs. Policy makers are deadlocked about how to improve the economy—if, in fact, some want the economy to improve in the run-up to the next presidential election.

Since 2009, when consumer confidence numbers fell to a Depression-era level, confidence in the US economy has been slowly strengthening, despite factors such as disappointing job-creation efforts, depressed home prices, and hard-to-qualify-for small-business loans. August 2011's US stock market roller coaster, near government shutdown, and credit-rating downgrade roiled global financial markets at the same time that the risk of European-government defaults increased. Possible results include a global financial-market crisis and increased risk of a double-dip US recession. Small wonder that August consumer confidence plunged to a record-breaking 35-year low. Which consumers are optimistic (bulls), which consumers are pessimistic (bears), and which consumers are most likely to have lost confidence?

VALS™ serves as a framework to explain why various consumers assess the US economy and their personal financial situation similarly or dissimilarly. Its analysis trends VALS™/GfK MR spring study data from 2005 through 2011. Responses to the following four questions are in the analysis:

1. How do you think the country's current business/economy compares with the business/economy in the past 12 months? (Better now, About the same, Worse now)
2. How do you think the country's current business/economy will be in the next 12 months? (Better, About the same, Worse)
3. Compared to the past 12 months, how are you and your households financially? (Better now, About the same, Worse now)
4. Financially, how do you think you and your household will be in the next 12 months? (Better, About the same, Worse)

VALS™/GfK MRI spring 2011 survey data for this report were collected between September 2010 and April 2011. A trend of data from fall studies is also possible. Although the trends in fall consumer-confidence numbers may differ from trends in spring confidence numbers, depending on market conditions, the consumer groups that are bulls and those that are bears will remain consistent until the economy enjoys a full-fledged rebound.

Innovators (Bulls)

Innovators are more bullish about the US economy than are most other consumers. Typically, Innovators are optimistic because they feel in control of their lives. Following a setback, Innovators readjust and recalibrate more quickly than other consumers because the majority focus on future possibilities. They see the glass as half full. For example, following significant stock market losses in 2009, the proportion of Innovators expecting the economy to improve in 2010 was higher than for any other group except Experiencers. Innovators were also bullish about their personal financial situation for the coming year. By 2011—pre-August and September stock market tumbles—almost one-third of Innovators reported their finances had improved.

Thinkers (Bears)

Similar to Innovators, Thinkers are more likely than average to report consistently that the economy is improving. Unlike Innovators, Thinkers focus more on the past and therefore are more pessimistic. They see the glass as half empty. Because the majority of Thinkers have diversified investment portfolios and follow financial news closely, Thinkers may have been among the first consumers to have picked up the early-warning signals that resulted in the 2008 financial crisis. In spring 2011, only one in five Thinkers reported improved economic and business conditions. In terms of personal finances, Thinkers are no more likely than average to report they are better off than they were a year ago.

Believers (Bears)

With stagnant wages and rising prices for basics such as food, clothing, and gasoline, many frugal, hardworking Believers are downwardly mobile. Believers' consumer confidence reflects the norms for all US adults. As early as 2006, many Believers felt economic stress. Since that time, at least one-half of Believers predict a worsening economy. The majority of Believers report no change in their personal financial situation from year to year; the proportion experiencing a difficult financial situation has grown. The 2010–11 MacroMonitor reports that one-half of Believers households believe that they are living on the edge—one paycheck, illness, or accident from being unable to make ends meet.

Achievers (Bears)

Because Achievers are more focused on personal finances than on the larger economic picture, home values and 401(k) balances serve as filters for most Achievers' consumer-confidence outlook. Similar to that of Believers, Achievers' confidence in the economy is average for all US adults; they view their personal financial situation somewhat more positively. In spring 2011, almost three in ten Achievers report that the coming year will bring more disappointing economic news. Between 2005 and 2011, the proportion of Achievers who report a worse personal financial situation than previously more than doubled.

Strivers (Bulls)

Strivers live in the present. Few are tuned in to hard news. Their primary measure, when thinking about the economy, is current spending power, not previous spending power. Strivers are better able to evaluate their personal finances than overall economic conditions. However, the majority of Strivers believe that luck is on their side (just around the corner); therefore, many are overly optimistic about their future. For example, from 2005 to 2011, roughly one-half of Strivers anticipate their financial situation will improve in the coming year, even though the majority report their financial situation to be about the same from year to year. Questioned about specifics in the 2010–11 MacroMonitor, the majority of Strivers households are living on the edge; they are more worried about keeping up financially than they are about moving ahead.

Experiencers (Bulls)

Experiencers are among the youngest consumers. With life ahead of them—largely unaware of pitfalls and light on details—the majority are very optimistic. Experiencers view the world through their own personalized lens. A positive personal experience colors their view of the larger world. Even in the current difficult jobs market, Experiencers' high self-confidence easily masks reality. Experiencers are more likely than all adults to report their financial situation improved in the past 12-month period. Except in 2009, fewer than one in ten Experiencers predicted that their personal finances would worsen in the next 12 months.

Makers (Bears)

Hit hard by lost jobs in the construction and manufacturing industries, many Makers are part of the downwardly mobile group of US citizens. Makers want to be independent and self-sustaining. Government help, even when they desperately need it, is a difficult pill for the majority to swallow. As a result, many jobless Makers are angry and resentful. Job-retraining programs have met with resistance because, in general, Makers don't want to substitute new skills for skills in which they are already proficient; they want their old job back, not a new job. As early as 2006, Makers' confidence in the economy turned sour. The proportion of Makers who report their personal finances to be worse off is double the proportion who report them improved. The most current MacroMonitor data show that the majority of Makers households believe they are living on the edge; the same proportion agree they are worried about keeping up financially—forget about moving ahead.

Survivors (Bears)

Many Survivors live on a fixed income; most rely heavily on social-safety-net programs: Social Security, Medicare, and Medicaid. Congressional discussions about changes to these programs are particularly unsettling to Survivors. From a Survivors point of view, everything was better in the past than at present; they are more comfortable in reliving the past than in thinking about the uncertain future. Survivors' barometer of how the economy is doing comes primarily from two sources: local TV news (with the majority of stations hyping bad economic news) and prices at the grocery store. Although the majority of Survivors report their financial situation unchanged from the previous year, the proportion to do so continues to decline. Data from the 2010–11 MacroMonitor show that almost one-half of Survivors households agree they believe they are living on the edge—one paycheck, illness, or accident from being unable to make ends meet; two-thirds of households are worried about keeping up financially.