Continuing "Trend Week," the consumer holds the reigns to the near future. As reported in the recent BIGresearch economic news briefing of Consumer Insights, consumers aren't willing to put present economic conditions behind them to start a new year. With holiday bills rolling in, gas prices hiking up, and a housing market without a foundation, only 33.6% indicate that they are very confident/confident in chances for a strong economy, the lowest reading since the 33.4% recorded in September '05 (post-Hurricane Katrina). This month's reading is down more than three points from December's already-weak 37.0%, and almost 17 points lower than one year ago 50.5%.
It looks like the "holiday hangover" has begun to set in, says the report. More shoppers have plans to freeze their unnecessary spending, with 41.2% indicating they've become more practical and realistic in their purchasing, up from December (40.3%) as well as January '07 (39.6%). However, now that the gift card redemption season has begun, retailers can begin counting that revenue. However, 49.9% of consumers indicate this month that they are focusing on needs over wants in purchasing, rising from December and January '07.
5.2% of consumers fear becoming laid off, up from 4.5% last month and the highest reading since February '06.
With the Energy Information Administration forecasting gas prices at over $3/gal in '08 and well into '09, the 74.5% of consumers impacted by fluctuating gas prices report that:
Of the 34.1% of consumers affected by the problems in the U.S. housing market, and the 28.4% "unsure," to cope with this situation:
With declining confidence, mounting credit card debt, a shaky housing market, and holiday bills left to pay, the 90 Day Outlook of Future Purchases continues to decline from last month as well as last year, with Lawn & Garden the lone category gaining from December.
Among those planning to buy or lease a new vehicle in the next six months, 12.5% are considering hybrid. increasing interest in cars. 62.2% of potential car buyers are considering more fuel-efficient vehicle types, up from 54.0% in January '07, with slightly declining interest seen in trucks and cross-over vehicles.
See the complete BIGresearch report here.