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Study: Customers get a little satisfaction

6/29/2016

“(I Can’t Get No) Satisfaction” has been the theme song of U.S. consumers for the past two years, but they may need to look for a new anthem.



Following steep falloffs in 2015 and 2014, the American Customer Satisfaction Index (ACSI) is changing course. In the first quarter of 2016, ACSI gained 0.4% to an aggregate score of 73.7 on a 100-point scale. Even this small improvement is a positive sign. However, it still does not reverse the significant decline ACSI has experienced since the first quarter of 2014, when it surpassed 76 and reached its highest point since 1994.



While ACSI does not provide any clear explanation of what is behind the falloff, it coincides with meager economic growth, depressed wages and mostly weak household spending growth. ACSI analysis suggests the decline in customer satisfaction could be due to decreasing levels of competition in the U.S. marketplace. Prices have risen more than wages have in recent years. As a result, consumer satisfaction tends to suffer, even with high levels of employment.



Consumer spending growth has slowed to 1.9% for the first quarter of 2016, below the 2% increase forecast by ACSI. For the second quarter, based on the uptick in customer satisfaction ACSI forecasts growth between 2.4% and 2.9% – still below what is needed for a strong economy.



"There is no mystery about what's required for the economy to do better: more discretionary income for U.S. households and a lift in the expected utility that consumption will bring," said Claes Fornell, ACSI chairman and founder. "Neither is likely with less competition, which puts a damper on both wages and buyer satisfaction."
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