Are Consumers Ready to Spend Again?
by Toby Smith 01/21/09
For the first time since May 2008, we're seeing signs of a tiny consumer spending uptick in our ChangWave surveys. We're also registering an improvement in consumer sentiment and expectations going forward.
These improvements, however, are tenuous at best. Just as the May uptick was due, in part, to heightened expectations over the stimulus package, the current outlook may have much to do with the anticipation surrounding the new administration's economic stimulus plan.
Reduced inflation -- particularly lower gasoline prices -- is another likely contributor to this survey's modest signs of stabilization.
The big question going forward is whether these trends will continue or if this is simply a short-term blip.
Here's a look at the good, the bad and the ugly from the latest ChangeWave consumer spending survey of 2,798 U.S. consumers, which was conducted Jan 5-9.
The Good
While overall spending still looks terrible, the 90-day outlook is not quite as horrible as it was in last month's survey (December 2008).
Fifty-seven percent of U.S. respondents said they'll spend less during the next 90 days than they did a year ago -- but that's three points better than in the December survey. Another 13% said they'll spend more -- two points better than previously.
