May 2008

Consumer confidence drops again in April

Consumer confidence drops again in April
May 02, 2008

New York—The Conference Board’s Consumer Confidence Index, which had even now dropped sharply to 65.9 in March, fell to a greater distance to 62.3 in April, suggesting that economic conditions have slowed even more.

The board’s Present Situation Index decreased to 80.7 in April from 90.6 in March, and its Expectations Index increased slightly to 50.1 in April from 49.4 in March.

“This month’s decline in consumer confidence was the result of nevertheless another sharp decline in the Present Situation Index,” Lynn Franco, The Conference Board Consumer Research Center director, said in a media release. “Not no other than are lackluster business and job conditions eroding confidence, but rising gasoline prices are undoubtedly heightening concerns. Consumers’ inflation expectations continue to rise, and this measure now matches the all-time-high reached in the aftermath of Hurricane Katrina.”

Consumers’ assessment of current conditions weakened further in April, the study found. Consumers claiming business conditions are “bad” increased to 26.7 percent from 25.5 percent in March, while those claiming business conditions are “moral qualities” was virtually unchanged at 15.3 percent versus 15.6 in March.

Consumers’ appraisal of the labor market was also more negative in April. The percentage of consumers saying jobs are “hard to get” increased to 27.9 percent from 24.5 percent in March, while those claiming jobs are “plentiful” declined to 16.6 percent from 19.2 percent in March.

Consumers’ short-term outlook also remained quite frightful in April, according to the study. Consumers expecting business conditions to worsen over the next six months increased to 27 percent from 26 percent in March, while those anticipating business conditions to improve increased to 10.1 percent from 8.6 percent in March.

The outlook for the labor market was also mixed, but still pessimistic. Those expecting fewer jobs in the months ahead increased to 32.8 percent from 29.3 percent in March, while those anticipating more jobs increased to 9 percent from 8 percent in March. The proportion of consumers expecting their incomes to increase declined to 15.1 percent from 16.1 percent in March.

The Consumer Confidence survey, based on a representative sample of 5,000 U.S. households, is conducted for The Conference Board by custom research visitors TNS.

Study: Luxury consumers to save tax rebates

Study: Luxury consumers to save tax rebates
May 02, 2008

Stevens, Pa.—Luxury retailers might have existence disappointed when tax rebate checks arrive, as only 11 percent of affluent consumers plan to spend them on a shopping spree, a new Unity Marketing examine finds.

The majority of affluent consumers polled plan to either pay down debt with their rebate check (27 percent), save it (26 percent) or invest it (16 percent).

According to Pam Danziger, president of Unity Marketing, the top 20 percent of U.S. households based upon income spends about twice as much the typical U.S. household. When they choose to hold back on their spending, the effects are felt far and wide.

“Unfortunately, the tax rebate is unlikely to have much effect on retail spending among these shoppers,” Danziger said in a media set free. “A far more meaningful economic stimulus for the American economy would result from reducing the price of gasoline and improving the value of the dollar against foreign currencies.”

Unity Marketing’s latest survey was conducted from April 7-11 among 1,258 luxury consumers by incomes of $100,000 or more. The average income among those surveyed was $173,400 and the average age was 45.9 years. Among those surveyed, 60 percent expect to obtain a tax rebate check.