Boomers again pushed spending confidence higher in December, but Millennials may hold back the outlook for consumer spending through the remainder of the holidays and to start the New Year.
The uptick in confidence follows a big jump in the immediate aftermath of the November election (see here). The back-to-back increases provide some hope that retail spending is rebounding from a pre-election slowdown (see latest here).
The spending outlook, however, will remain uneven by generational group—according to breakouts of MacroSavvy’s Spending Confidence Index™, which is based on data from Prosper Insights and Analytics™:
- Millennials. Spending confidence edged lower among Millennials, but the decline was significant among Millennials with a college degree—where the spending power is greatest.
- Gen X. Confidence to spend edged higher among Gen X consumers, but jumped among working-class Gen X. As a whole, Gen X will be a key to the outlook because the size and growth of Gen X spending plans are holding up better than Millennials and Boomers.
- Boomers. Spending confidence increased most among Boomers and especially among college-educated (i.e., professional class) Boomers. However, the post-recession scale of Boomer spending plans continues to lag Millennials and Gen X.
- By Category. Discretionary goods continue to benefit disproportionately from stronger spending confidence—especially electronics, home and leisure goods. Clothing is benefiting significantly less among discretionary categories.
On a related note, the December survey results showed a pronounced letup in the worries about “political and national security issues” that had taken a toll on retail spending in the run-up to the elections. The letup occurred across generational groups.
See the scorecard for a summary of the spending confidence measures.
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.
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