The outlook for food-related spending is most at risk as a result of a July letup in confidence. Confidence to spend fell off in food categories, but held its ground or improved in all other categories.
The Spending Confidence Index™ overall ticked lower in July because of the weaker confidence in food and grocery categories. Among discretionary goods categories, however, confidence to spend increased at about the pace of the past year—led by electronics and clothing.
The 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 the consumer confidence index from the Conference Board and the consumer sentiment index from 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™ indicates:
- A month-to-month letup. The letup in spending confidence is partly the result of a comparison to a relatively strong prior month. Confidence remains up year-to-year and year-to-date at rates that are close to the trend of the past year.
- Consumable goods drag. While confidence to spend in health and beauty categories held steady, confidence in food and grocery spending fell off significantly month-to-month. Confidence to spend at restaurants also fell off month-to-month.
- Discretionary goods strength. The sustained modest gains in discretionary categories—led by electronics and clothing, but also including homegoods and leisure goods—look more impressive when you recognize that they come on top of a strong prior-month gains.
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