The U.S. economy may be heading out of a slump, having added 290,000 jobs last month, according to the Labor Department. And the global economy may be heading up as well, assuming the fiasco in Greece doesn't derail a recovery. New data from Nielsen suggest global consumer confidence rose in the first quarter, rebounding to reach its highest level since the third quarter of 2007.
The firm's Nielsen Global Consumer Confidence Index rose to 92 points last quarter, eight points below the average but a six-point increase from six months ago. The latest index, which gauges consumer confidence on data about major consumer concerns and spending intentions, involves survey responses from some 27,000 Internet users in 55 countries between March 8 and March 26. The study said the number of global consumers who believe they are currently in recession dropped 19 points to 58% compared to 77% a year ago.
According to Nielsen, the jumps in global consumer confidence and spending habits have been driven by improved confidence for jobs and employment. In the first quarter this year, 43% of global consumers described their job prospects as excellent/good compared to 35% six months ago. One in three global consumers said they are planning to increase spending for out-of-home entertainment, new clothes and new technology over the next six months.
The firm said consumer confidence hit an all-time low on the Nielsen index of 77 in early 2009, and then began rising last year, in 41 of the 55 countries surveyed during the quarter. India, reaching 127 index points, Indonesia (116 points) and Norway (115 points) were the world's most confident. On the other extreme, Lithuania (46), Croatia (48), and Portugal (51) were the most pessimistic.
All global regions posted positive increases in consumer confidence, per Nielsen, but the pace and extent of economic recovery further widened between the booming Asia-Pacific and Latin American countries compared to the sluggish recovery in the United States and western Europe.
The countries with the biggest increases in consumer confidence in the first quarter were Taiwan (up 14 pts), Singapore (up 11), Israel (up 10), Mexico (up 10) and Colombia (up 9). No big surprise -- Greece recorded the steepest decline, a 15-point drop.
"Asia Pacific consumers -- who were among the first to cut back drastically on discretionary spending 18 months ago -- are now confident enough to spend their way into higher growth," said Venkatesh Bala, chief economist at Nielsen unit The Cambridge Group.
He said the U.S. and Europe are likely to see a period of slow demand growth in conjunction with a largely jobless recovery in the U.S. "Consumer product companies will require a high degree of precision in targeting, value propositions and pricing in order to generate topline growth and profitability."
Bala says the habits consumers developed during the recession continue -- price sensitivity, private labels and promotions -- are still top-of-mind to the value-conscious consumer.