Consumers say they feel uncertain but still spend freely
Consumers say they feel uncertain but still spend freely
Consumers seem to keep riding to the rescue of this economy. They defied expectations of a downturn and shopped more in November, with retail sales up 0.3% from the month before.
Sure, some of it’s buy now, pay later and some of it’s going on plastic. Still, consumers seem to have the wherewithal to keep spending.
That might seem kinda surprising since their mood, as consumers, remains pretty lousy. Yet they’re buying up everything from cosmetics to sporting goods to furniture.
“The number of people saying that they’re comfortable with making a major purchase or a household purchase has improved,” said Chris Jackson, who surveys consumers at public-opinion firm Ipsos.
They’re not just spending on stuff; it’s also services and entertainment, per Sofia Baig at Morning Consult.
“Especially this summer, we saw a big boom in that — on recreation, Taylor Swift concerts, traveling,” she said.
AAA predicts near-record travel for the holidays. But there is a disconnect here: between consumer spending, which is exuberant, and consumer sentiment, which is down in the dumps.
“I do think the relationship has become a little messed up,” said Baig.
Consumers drive the economy, yet “consumer sentiment has never really recovered since the pandemic,” she added. “It’s a little confusing as an economist to figure out why people feel so bad, but yet people are spending as if they feel good.”
Chris Jackson at Ipsos sees an overwhelming sense of precariousness.
“Even as there’s not actually a lot of people reporting job losses, people are pretty stable in terms of personal finances,” he said. “They don’t know what’s going to come next. So there’s this sense of anxiety.”
Then again, maybe spending it up is just a distraction: “A form of retail therapy,” Jackson said, “about all the uncertainty in the world.”
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