Confidence affirms tepid spending outlook—except for Millennials

The outlook for consumer spending remains tepid as confidence to spend over the next 90 days again moved sideways in May—with Millennials showing the only notable sign of improvement.

As a result, retail spending should keep to the slower pace that has emerged in recent months (more on retail spending here).

The Millennial bounceback from April will mean some isolated opportunity, but no generalized benefits across categories as highlighted below.

  • Food & grocery. This category took the brunt of the weakness in confidence to spend among categories in May. The decline was particularly striking among one key demographic segment. See the report below for more.
  • Health & beauty. Confidence to spend on health and beauty jumped among one key generational group in May, but was flat across generations. See the report below for more.
  • Homegoods. Homegoods categories were another bright spot in the spending confidence of one particular generation in May. At an aggregate level, however, confidence to spend held relatively steady. See the report below for more.
  • Leisure goods. Confidence to spend on these goods—including sporting goods, toys, music, and videos—also held relatively steady at an aggregate level. The opportunity, however, is among two demographic segments where confidence to spend held up better than average. See the report below for more.
  • Electronics. The electronics category held up best among all categories at an aggregate level, but showed some weakness among two key generational groups. For more, see the report below.
  • Clothing. Confidence to spend on clothing held steady overall in May and showed no strong signs among key demographic segments. See report below for more.

These are among the takeaways from data through May from the Spending Confidence Index™, which is the proprietary index of consumer sentiment created by MacroSavvy™ based on data from Prosper Insights and Analytics™.

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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