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HomeINFORMATION & INSIGHTS
Some Signs of Hope
Despite a Continuing Decline
In
Consumers’ Perception of the Economy
Have consumers reached the limits of their cost-cutting efforts? The latest information from NPD’s Economy Tracker shows consumer confidence continues to decline, albeit slightly, while intent to spend at retail remains steady. This could indicate that consumers may have reached their cost-cutting limits.
The study reveals consumers’ perception of the economy slipped a fraction of a point to 36.5 in March, from 36.7 in February. “With the indicator off only a fraction of a point, consumers’ perception of our economic situation is virtually unchanged from last month,” said NPD Chief Industry Analyst Marshal Cohen. The Economy Tracker measures consumer concerns regarding the economy on a scale between 0 and 100, with 0 being “Very Concerned” and 100 being “Very Confident.”
With concern down only slightly, consumers did not dial back spending intentions. The Economy Tracker’s Retail Response Indicator rose 0.5 point in March. “This slight rise could be an indication that we are seeing the beginning of stabilization,” said Cohen. The Retail Response Indicator measures consumer spending intentions on a 0 to 100 scale, with 0 representing “Reduce or Spend Less” and 100 representing “Spend More.”
“Despite continued news about economic challenges and the tough jobless numbers March brought, I am encouraged that consumers aren’t saying they’ll cut spending even more. I believe consumers have reached the point where they’ve cut as much as they can and now they just need to replenish. Consumers are telling us they are thinking about spending again, but spending with caution," Cohen said.
Methodology:
The Economy Tracker is based on online surveys completed by 1,000 respondents each month. The sample is nationally representative. Results are delivered in 12 monthly reports, quarterly summaries and a year-end analysis. Contact us for details.
To learn more about how NPD can help your company anticipate and respond to economic challenges, contact Charles Camaroto at 866-444-1411 (+1-516-625-2311 outside the U.S.), or email contactnpd@npd.com.