NPD: Consumer spending intentions low
PORT WASHINGTON, N.Y. The NPD Group has found that consumer attitudes toward the economy and intentions to shop are at their lowest point since October. However, consumers’ concern for job security appears to be leveling off, which could mean they are preparing to spend again. Findings were reported in NPD’s Economy Tracker, a monthly report on consumer attitudes and spending intentions.
The Economy Tracker measures consumer concerns regarding the economy on a scale between 0 and 100, with 0 being “Very Concerned” and 100 being “Very Confident.” In February, the Economy Tracker’s General Economic Perception indicator fell to 36.7, from 38 in October. Outside of a slight lift in January, the indicator has moved steadily downward since October, the first month of reporting.
Mirroring consumer concerns about the economy was a decline in consumer shopping intentions. The Economy Tracker’s Retail Response Indicator measures consumer spending intentions on 0 to 100 scale, with 0 representing “Reduce or Spend Less” and 100 representing “Spend More.” The Retail Response Indicator dropped more than 2 points to 35.4 in February.
“One important thing to note here is that the 2 point drop in how consumers feel about the economy in general translates to a 5 point drop in what consumers’ purchase intentions are,” noted Marshal Cohen, chief industry analyst, The NPD Group. “And while a 5 point drop doesn’t seem like much, it represents millions of dollars.”
Despite consumers’ fading confidence regarding the economy in general, NPD did find evidence of a potentially positive sign in the leveling off of consumers’ concern regarding job security.
According to Cohen, “Of all the data I look at, this measure provides one of the best indications of how consumers are going to behave. February’s results show consumers feeling better on this front and could signal consumer stabilization, a point at which consumers catch their breath, reassess and prioritize their purchase needs in preparation to begin spending again. Stabilization is a pre-cursor to growth.”