Commentary

Wishy Washy Consumer Expectations, Except "Gas Will Go Up"

Wishy Washy Consumer Expectations, Except "Gas Will Go Up"

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As of October 9th, the BIGresearch Consumer Intentions & Actions Survey notes that while consumer confidence rose in October to 44.7% (from 41.2% in September), it's down from the almost half (49.8%) who said they were confident/very confident one year ago.

Some other key findings in the current survey include these economic influences:

  • The war with Iraq, now coupled with unrest in Myanmar, continues to weigh on consumers' minds. 17.4% worry about political and national security issues, up more than a point from September (16.1%), though down from '06 (21.2%).
  • Though confidence increased, consumers are showing signs of hedging their spending. Practicality in purchasing rises two points from September to 38.6% in October. One year ago, says the report, more than two in five (43.3%) asserted they were adhering to the practical path.
  • 47.1% of consumers say they are focusing on needs over wants in spending (up from 43.2% last month). This figure is down from '06 when the majority (52.3%) were focused on the essentials.

In considering the consumer's personal financial moods, the reports concludes that: 

  • After spiking in September at 38.8%, 35.9% of consumers now say there will be "more" layoffs in the next six months. 55.2% contend that layoff levels will remain the "same" (up from 52.6%) last month, while 9.0% indicate "fewer" (up slightly from 8.6%). With holiday bills imminent, consumers are a little more concerned about their own employment security, since 4.6% worry about becoming laid off, up from 4.0% in September.
  • Forecasting a more conservative financial outlook in October, 34.9% of consumers plan to pay down debt over the next three months, up from 32.0% in September, though down from 36.6% in '06. 28.4% say they'll decrease overall spending, compared to last month's 25.8% and last year's 33.6%.  Also on the rise from September are plans to increase savings and paying with cash more.
  • Although gas prices have risen in the past 12 months this doesn't seem to have had too much impact on consumer spending habits concludes the study. Currently, 28.7% indicate that prices at the pump aren't putting a dent in their spending. Among the more than 70% that are affected, though, 36.2% are combating pump prices by simply driving less, 30.7% have reduced dining out, while 30.0% have decreased vacation/travel plans.

And, drivers are not anticipating lower gas prices by Thanksgiving Day. More than three in five (62.6%) say that pump prices will rise by November 22, about a third (32.1%) predict the "same," while a scant few (5.3%) contend they'll be lower.  Drivers are predicting an average price of $3.04/gal at Thanksgiving, up from the $2.95 anticipated for Halloween.

Please visit BIGresearch here for the complete briefing.

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