Consumer Confidence Up in Mid-July, But Still Conservative

by Jack Loechner, Jul 26, 2006, 3:00 AM

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Consumer Confidence Up in Mid-July, But Still Conservative

According to theBIGresearch Consumer Intentions & Actions Survey of over 8,000 consumers as of July 12, confidence rebounds with 39.5% confident/very confident in chances for a strong economy, up almost four points from last month, but still four points below last year (43.9%). And, this uptick in confidence also has consumers less worried about political/national security issues. This month, 18.1% report that they remain concerned, down about a point from last month, and even with last year.

More than two in five consumers, though, contend they've become more practical and realistic in purchasing, up two points from June (39.9%) and more than four points from last year (37.4%). Mirroring the rise in practicality, this month more also insist they're focusing on needs over wants... the majority (52.0%) say so, a rise from 49.8% in June and 44.3% in '05.

26.9% of the respondents say they plan to increase savings in the next three months, up from 26.2% in June. "Pay down debt" is still the financial priority among 35.9%, relatively even with last month and down almost a point from last year (36.6%). "Pay with cash more" and "decrease overall spending" also stable from last month.

With the national average for regular unleaded gas topping off at $2.963/gal (AAA, 7/12/06), one-fifth of motorists say they'll alter driving habits at $3/gal, though it only took prices of $2.25 to $2.75/gal to change the patterns of 31.8% behind the wheel. Another fifth responded that prices at the pump will not influence them to change their habits.

78.2% of the younger crowd (18-34 year olds), which includes students and young families, cite that rising gas prices are crunching their budgets, which is significantly more than the 70.6% of those 55+ who say the same. 77.8% of middle-aged drivers (35-54 years) contend that gas prices are having no major impact on spending.

The 90 Day Outlook improves month-over-month in July for many categories, according to the BIGresearch Diffusion Index (those who say they'll spend less subtracted from those who'll spend more). But this month's bump in consumer confidence wasn't enough to boost most spending intentions year-over-year:

Retail Merchandise Categories - 90 Day Outlook (July 06 compared to June 06 and July 05)
Category	June 06	July 05
Children's	UP	UP
Women's Dress	UP	FLAT
CDs/DVDs/Videos/Books	UP	DOWN
Women's Casual	DOWN	DOWN
Men's Dress	UP	DOWN
Men's Casual	UP slightly	DOWN
Home Improvement	FLAT	DOWN
Shoes	UP	UP
HBC	UP	DOWN
Dining Out	DOWN slightly	DOWN
Decorative Home Furnishings	UP	DOWN
Sporting Goods	UP	DOWN
Linens/Bedding/Draperies	UP	DOWN
Toys and Games	UP	UP slightly
Electronics	DOWN	DOWN
Groceries	UP	DOWN
Lawn & Garden	DOWN	DOWN
Home Furniture	UP	DOWN
Source: BIGresearch, July 2006

See the complete report here.

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