Spending confidence among consumers steadied in August, but showed strength in clothing and electronics. This suggests a healthy Back-to-School season for those categories—especially online (as evident in retail sales trends).
Confidence to spend steadied itself most of all in the food/grocery category, which had slipped significantly the prior month. Among discretionary goods categories, gains in confidence moderated outside of the strength in clothing and electronics.
The Spending Confidence Index™ and its components are measures of consumer sentiment created by MacroSavvy™ in partnership with Prosper Insights & Analytics™. The white paper at this link explains why the new index is an improvement over existing measures of confidence.
The summary scorecard shows the clearer insight into consumer sentiment provided by the new index compared with the other more widely followed measures of confidence.
The latest data on confidence/sentiment from the Conference Board and the University of Michigan show a mix of components moving in opposing directions on a month-to-month and year-to-year basis.
Meanwhile, the Spending Confidence Index™ shows:
- Month-to-month steadiness.Overall spending confidence held steady in August, which was good news after last month’s sizeable decline among consumables categories pulled overall confidence slightly lower last month.
- Consumable goods level off.Confidence to spend in food and grocery was flat in August. This is actually good news in a period of falling food prices where consumers are inclined to economize on food spending to pay for higher prices in other categories (see latest price trends).
- Discretionary goods moderate.Spending confidence moderated in discretionary goods categories because the pickup in clothing and electronics was partially offset by homegoods and leisure goods, where confidence to spend was roughly flat month-to-month.
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