The latest BIGinsight consumer confidence reading puts it at its highest point since October 2007 – yes, that’s a year before the financial collapse of 2008. And with the holidays just around the corner, it seems that consumer spending is on the upswing.
Consumers who are either confident or very confident about the prospects for a strong economy make up 39.7% of those surveyed, up from 35.7% in October and the best result since 44.8% said the same all the way back in the aforementioned October of 2007.
Employment prospects are seen as improving as well. 26% see fewer layoffs in the near future – that may not seem like much, but BIGinsight says it’s the highest score they’ve ever recorded in more than ten years of asking the question. 22% still are pessimistic about it, expecting more layoffs, and 52.1% expect employment levels to remain about where they are in the near future.
Another positive economic sign is provided by the 43% who say they are very pragmatic when deciding on purchases. Again, some context is needed – that is much better than October’s reading of 48.2%, and BIGinsight says it’s the lowest score they’ve recorded in a November report going back to the 38.8% who said the same in November 2007.
Additionally, 50.2% say they focus on needs rather than wants with making purchases, down from 56.1% in October. Other family fiscal indicators all moved in the direction of more discretionary spending. 31.5% will work on paying down debt, down from 33.9%, 30.7% will decrease overall spending, down from 36.4%. 25.6% will increase savings, down from 28.1%.
Gas prices are still a factor, but the impact is down about 3% from October, with 70% saying they spend less on other things to keep their car’s tank full. 41% deal with it by driving less, 35.3% reduce eating out, and 31.3% decrease vacation travel in efforts to deal with it. Still, consumers benefitted from a 20 cent reduction in the price per gallon to $3.70 during the month.
RBR-TVBR observation: If consumer confidence can survive the possible demise of the Twinkie, it can survive anything!
We kid consumer confidence. But our sense, reading as we do these types of reports all the time from numerous sources, that the economic recovery has been moving along at a slower pace than we’d all like, but it is moving. Consumer confidence measurement is an inexact science, and results are full of peaks and valleys, but the overall trend has clearly pointed upward.
There are no economic tools available to the government that can match the power of consumers feeling they can afford to spend money on things other than basic necessities. Such spending gives businesses a reason to create product, which leads to more employment and more consumer spending – creating the virtuous circle we’ve all been waiting for.
And about those Twinkies – we understand the book isn’t closed on that count, and regardless, from the getgo we have believed that even if Hostess goes away, the Twinkie will survive – somebody will buy the rights.