Most consumers believe economy is in a downturn, survey says
PORT WASHINGTON, N.Y. Even as President-elect Barack Obama’s economy package begins to take form, consumers are still not ready to open their purse strings. Not yet. According to a NPD Group survey released Wednesday, 91 percent of consumers believe the economy is still in a downturn, up from 84 percent who felt that way in April.
“Off-hand, that 7 percent increase may not sound like a lot,” said Marshal Cohen, chief industry analyst for The NPD Group, “but when you turn the spending faucet of 14 million people off, that 7 percent from April to November represents trillions of dollars.”
And the number of consumers who say they will take advantage of sales or coupons has remained relatively steady since July. “So those huge sales that were designed to lure the customer in really don’t seem to have had much of an impact. They aren’t bringing the consumer’s back in to shop,” Cohen said.
Most consumers—57 percent—are cutting back on their spending by cutting down on their number of trips to restaurants, a factor that ought to bode well for grocery outlets. That is followed by cuts in spending on apparel. In the November Consumer Spending Indicator, 52 percent of respondents said they would cut back on apparel spending.
The same categories that were the least vulnerable in last month’s study remain so in the current month’s study with one slight change. Video games and toys remain steady while beauty is being edged out of the No. 3 spot.
Video games take the top spot as the least likely to see cut backs in consumer spending with 32 percent, followed by toys at 36 percent. This month, however, movies took the number three spot at 39 percent. Beauty slipped to forth this month at 41 percent. “But beauty is still showing that women remain loyal to their regimen even in tough times,” Cohen said.
As previously noted, an important measure of how consumers are fairing is how secure they feel about their jobs. In July, 25 percent of respondents said they were not concerned about their jobs, but in November only 19 percent reported they were not concerned.
“This is a number I watch very closely,” Cohen said. “I think it is the best indication of consumer behavior and now, what with the stock market, the political market, the media market and now, the job market, we are seeing an all time low here.”