The burst of confidence can be linked to a still-strong labor market and other macro factors considered among consumers of all demographics. Assessments of the present situation rose on sunnier views of business conditions in June employment conditions.
The spread between consumers saying jobs are ‘plentiful’ versus ‘not so plentiful’ widened, indicating upbeat feelings about a labor market that continues to outperform,” Reports indicate. “Likewise, expectations for the next six months improved materially, reflecting greater confidence about future business conditions and job availability.”
According to the think tank’s latest data, confidence was most evident among people under age 35 and those earning more than $35,000. Mirroring growing confidence, consumers are dialing back some of their worst economic fears, as 69.3% said this month that a recession is “somewhat” or “very likely,” compared to 73.2% in May. Looking ahead, 30.3% of respondents said they expect their family finances to improve over the next six months, up from 28.9% last month.
So why is the media only reporting bad news? Because that’s what leads to clicks. Stories of people who can’t afford car and house payments excel instead of the real power of consumers’ wallets.
I talked to a buyer at a major retailer, and she said she sees a shift in discretionary spending. Products that were “nice to have” sit on shelves while “products I need” move. She also said that many of her shoppers are buying products that make them feel good because they feel “they earned it”.
Retailers are resetting aisles faster based on their data, and many brands are being moved to less-than-desirable locations, but that’s a new reality. When I asked her about brands that raised prices, she said she saw a move to less expensive products, including private labels.
There are still some categories that still need to come back down to earth. Some car brands are still trying to charge more than MSRP, frustrating buyers. As interest rates rise, car sales will be affected. Repossessions are again climbing, and even used car sales are starting to decline.