During 2019, the economy has been on a wild ride. Lots of good news. Offset by bad news as well. Especially around the globe. To marketers, a key indicator of future shopping behavior revolves around consumer confidence. When people are more confident, they tend to buy more. Unfortunately, recent research finds that consumer confidence takes a dip.
Until now, the U.S. consumer has been more confident than those in other regions in the world. For example, click here.
August 2019 Survey: Consumer Confidence Takes a Dip
The University of Michigan regularly conducts one of the most respected consumer confidence surveys in the world. Through its Survey Research Center, it monitors the ups and downs of U.S. consumer sentiment.
The most recent survey was conducted in August 2019. And the Survey Research Center reached these conclusions:
“The Consumer Sentiment Index posted its largest monthly decline in August 2019 (-8.6 points) since December 2012 (-9.8 points). The 2012 plunge reflected fears of being pushed off the “fiscal cliff” due to rising taxes and falling government spending. The recent decline is due to negative references to tariffs. Spontaneously mentioned by one-in-three consumers. Current tariff policies have been subject to repeated reversals amid threats of higher future tariffs. Such tactics may have some merit in negotiations with China. But they act to increase uncertainty and diminish consumer spending at home.”
“Unlike the repeated tariff reversals, negative trends in consumer sentiment cannot be easily reversed. In fact, data indicate that the erosion of consumer confidence due to tariff policies is well underway. Consumers who made spontaneous negative references to tariffs also voiced higher year-ahead inflation expectations. More frequently, they expected rising unemployment. And they expected smaller annual gains in household incomes. The overall level of sentiment remains consistent with modest gains in consumption. Yet, the data nonetheless increased the likelihood that consumers could be pushed off the ‘tariff cliff’ in the months ahead.”
Through the following chart, Statista shows changes in consumer sentiment over time.
To conclude, view this video featuring the Survey Research Center’s director.