Consumer Confidence Up in Mid-July, But Still Conservative

by , 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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