Spending confidence among Boomers surpassed Millennials in April, defying a longstanding pattern of behavior in which younger people are always more optimistic than older people.
A clear benefit to store-based retailers—which had previously benefited from Boomers’ spending—remains elusive. Although topline retail sales have firmed, most store channels remain weak while sales gains skew online (see more here).
Besides being held back by slumping confidence among Millennials, spending gains also are being moderated by the steadier trend in confidence among Generation X—which these days is the core driver of consumer spending.
These are among the takeaways from data through April from the Spending Confidence Index™, which is the proprietary index of consumer sentiment created by MacroSavvy™ based on data from Prosper Insights and Analytics™.
In terms of other insights from the Index by generation and category:
- Millennials. Confidence continues to decline most dramatically among college-educated Millennials across all categories. Among working-class Millennials, spending confidence is holding up better—especially in homegoods, clothing, health and beauty, and leisure goods.
- Gen X. Confidence continues to hold up among Gen X, but is somewhat mixed by category and income segment. Confidence to eat out jumped in April, which may not bode well for food and grocery. Homegoods spending confidence picked up in April after lagging in prior months.
- Boomers. While gains in confidence are widespread, they were most pronounced in April in clothing and homegoods categories—and skewed slightly toward working class Boomers. Spending confidence to eat out also was strong in April, which likely contributed to weakness in food and grocery.
- By Category. Most notable may be the net gains in confidence to eat out. This may be adding to the recent drags on food and grocery spending—including the impact of a renewed pickup in fuel and food price inflation (see recent post here). Homegoods also are benefiting from stronger spending confidence, especially at the lower end of the market.
For more background about the Spending Confidence Index™ and its components, the white paper at this link explains why the new index is an improvement over existing measures of confidence.
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