Foodservice Equipment Reports

Flux In Markets Hits Consumer Confidence

The dog days of summer? Not this year. Despite the volatility on the world’s stock exchanges, consumers are in holding pattern of feeling confident, if wary.

What does that mean? You can look at the new numbers this way: Despite a dip in late August due mostly to the recent volatility in stock prices, any wavering in consumer confidence was offset by steady, quite favorable job and income growth. The Consumer Sentiment Index was 91.9 in the late August survey, down from 93.1 in July but significantly better than last August’s 82.5. The Expectations Index dipped to 83.4 in August from July’s 84.1—remaining considerably higher than the 71.3 recorded last August. Both Indexes are maintained and recorded by the University of Michigan’s Surveys of Consumers.

Add to those reports the news that personal finances are improving. According to UM’s survey, consumers see their personal financial position as positively as at any time in the past eight years; an improved financial situation was reported by 45% of all households in August, only marginally below April’s peak of 47%.

More than a third of households report recent income gains, reports UM, and half anticipate higher income during the year ahead. Their optimism extends to a conviction by three-fourths of those surveyed that unemployment would hold constant or decline in the year ahead.

Measures taken by The Conference Board for its Consumer Confidence Index before the stock market crash (or re-set), showed a rebound in August to 101.5 from July’s decline of 91.0. “Consumers’ assessment of current conditions was considerably more upbeat, primarily due to a more favorable appraisal of the job market,” explained Lynn Franco, the Board’s director-Economic Indicators. “Consumers are once again feeling optimistic about the near future. Income expectations, however, were little improved.”

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