Consumer sentiment takes a leap forward

0

ChartAnother sounding of consumer attitudes has confirmed the upward trend. The Consumer Reports Index measured a significant April surge, reaching its highest level since 2008. The positive move was accompanied by a slight lessening of household financial challenges.


The CRI is now sitting at 54.5, up from 50.1 in March. CR says the biggest gain, for a change, came at the lower end of the income spectrum, among households with less than $50K in annual income.

CRI trouble tracker is down from 42.3 to 41.7. The financial element that bucked the trend was in the area of medical expense – there was an increase in the number of consumers unable to afford medical bills from 12.4% to 14.1%. But most other financial pressures decreased.

“It has been a real positive month for a lot of Americans. The recession has had a long tail that continues to burden lower-income families disproportionately. Improving sentiment among that group indicates that they are starting to feel better about the days ahead,” said Ed Farrell, director of consumer insight at the Consumer Reports National Research Center.

According to CR, the improved sentiment has not yet shown up in retail cash registers. Spending activity actually lessened. This was particularly true in the major appliance and major home electronics categories.
Employment was on an even keel, with job creation and job loss figures dueling to a draw.

Looking ahead, Farrell noted, “With the rollercoaster ride that has defined the consumer’s experience of the recovery, hesitancy to spend may be a rational outcome. It is likely to take several months of improving prospects and a strengthened job outlook before consumers fully engage.”

RBR-TVBR observation: This is worth sharing with your clients. A wide variety of surveys show consumer confidence on the rise. A confident consumer is a consumer willing to spend – and this willingness may well be amplified by the tendency of many to put off high-ticket expenditures that has been in effect since the financial implosion.

This is despite the paradoxical decrease in retail spending as confidence rises – if the confidence level continues to move up, the reversal of the spending trend could be impressive, fueling the need for more goods and services, fueling the need for employees, creating more consumers with money to spend, and in the end fueling the virtuous circle that will lead to a more robust economy in general.

In short, this is a good time for businesses with goods and services to sell to get their message out there. And if advertisers can successfully cajole and soothe consumers into opening their wallets, they and their customers will be doing their patriotic duty to improve the economy.

Script: When one American buys something, other Americans have to make it, ship it and sell it — that means jobs. And if more Americans have jobs, more Americans can afford to buy something. So be a patriot and support America — by buying Blidget’s Widgets today — the widgets that will strengthen your home, and strengthen America!”

Use it!