More Tough Times Ahead for U.S. Consumers
by Toby Smith 02/23/09
When we reported seeing the first small uptick in consumer spending since May 2008 in our January survey, we thought it might mean consumer spending was stabilizing.
However, we cautioned that it could be a short-term phenomenon due to anticipation surrounding the new administration's economic stimulus plan and reduced inflation, particularly lower gasoline prices.
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Well, the February results are in, and it appears the tiny signs of stabilization we picked up in our January ChangeWave Alliance consumer spending survey proved extremely short-lived.
The February survey of 2,701 U.S. consumers points to yet another leg down in U.S. consumer spending going forward. Consumer sentiment has also taken a big hit, as 2-in-3 respondents said they now believe the overall direction of the U.S. economy is going to worsen during the next 90 days.
After 13 months of recession, U.S. consumer spending is still trending downward.
Grim Spending Outlook
While our January consumer survey contained intriguing signs of a leveling off in the rate of spending decline, the February results show a reversal and represent the worst spending outlook ever recorded in a ChangeWave survey.
Sixty-one percent of U.S. respondents said they'll spend less money during the next 90 days -- four points worse than our early January survey.
Just 12% said they'll spend more money -- one point worse than previously.
A Decline in Consumer Sentiment and Expectations
We also asked respondents about their impressions of the economy, and found that consumer sentiment and expectations have turned considerably more negative.
