Inflation’s Not the Only Issue Impacting Consumer Sentiment
Consumer expectations appear to be getting a touch more pessimistic.
The Conference Board’s Consumer Confidence Index for March was essentially unchanged at 104.7, versus a downwardly revised 104.8 in February. And while the Present Situation Index rose to 151 from 147.6 in February, more concerning is their outlook six months out. The Expectations Index fell to 73.8 from 76.3 last month. A reading below 80 often signals that a recession could be on the horizon.
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Dana M. Peterson, chief economist at The Conference Board, said on Wednesday that consumers “became more pessimistic about the future.” By age, confidence among consumers aged 55 and up rose, but deteriorated for those under 55. By income level, consumers in the $50,000 to $99,000 income group reported lower confidence in March, although confidence rose slightly in all other income groups. But Peterson also noted that over the “last six months, confidence has been moving sideways, with no real trend to the upside or downside either by income or age group.”
While elevated price levels remain a concern for consumers, this time consumers also “expressed more concern about the U.S. political environment compared to prior months,” she said.
Expectations for the next six months slipped to the lowest level since October 2023. In the latest survey, 17.6 percent of respondents said they expect business conditions to worsen, up from 16.9 percent. As for the short-term labor market outlook, 18.2 percent said they anticipate fewer jobs, up from 17.5 percent last month.
In a separate study from the Amazon intelligence platform for e-commerce sellers Jungle Scout, a survey of 2,000-plus U.S. consumers found that 21 percent said their spending fell in the first quarter of 2024. That represents the lowest in any quarter since the second quarter of 2022, Jungle Scout said on Wednesday. And with inflation still a persistent concern, the survey found that over 70 percent of consumers are looking for products with the lowest price.
The majority of consumers, at 52 percent, said they’re spending the same amount in the first quarter as they did in the fourth quarter of 2023. But nearly one-third at 32 percent, said their spending fell in the first quarter, while 16 percent said their spending rose in the quarter.
Apparel, footwear and jewelry sales on Amazon rose 15 percent from year-ago levels. For apparel sales, Jungle Scout’s data indicated that Amazon captured 19 percent of the market, with Walmart.com at 11 percent and Target.com at 4 percent. That compares with in-store apparel sales at Walmart at 20 percent and at Target at 7 percent.
The Jungle Scout survey saw concerns similar to those found by The Conference Board that’s impacting consumer sentiment. In addition to ongoing inflation concerns, respondents expressed new worries about the job market and the political environment ahead of the presidential election in November. Moreover, Jungle Scout’s 2024 State of the Amazon Seller Report found that it isn’t just consumers who are worried about inflation. More than a quarter of brands and sellers on Amazon are also worried about its impact.
