Spending confidence has moved higher led by Baby Boomers while it continues to slump among Millennials in the wake of the presidential election. The net impact should boost retail sales for the holiday, although results will remain mixed by category and channel.
The clothing and homegoods categories were the main beneficiaries of the November pickup among Baby Boomers and, to a lesser extent, Gen X consumers. The category laggards were Food and Grocery and Electronics.
The November results suggest that spending confidence and retail sales will continue to be held back to some extent by the number of consumers—especially Millennials—who say that they “worry more about political and national security issues,” according to November survey results from Prosper Insights and Analytics™.
That percentage concerned about political and national issues moved back up near the recent peak (24.1%) reached during the August political conventions. The increased concerns were led by Millennials—whose worries are now only slightly below the highs reached as the financial crisis unfolded in 2008.
In recent months, these political worries and their impact on spending confidence have coincided with weak or mixed retail sales results (more here).
The Spending Confidence Index™ shows:
- A month-to-month jump. Overall spending confidence jumped in November, led by confidence to spend among Baby Boomers and Gen X consumers—especially on discretionary goods, while consumable goods only edged higher.
- Discretionary goods surge. Confidence to spend on discretionary goods surged among Baby Boomers, and increased at a healthy rate among Gen X consumers. Electronics and Leisure Goods were the laggards, which were held back almost entirely by Millennials.
- Consumable goods uptick. Confidence to spend on consumable goods confidence did not surge as it did with discretionary goods, but still managed to edge higher. Consumable goods also were held back by Millennials—while confidence to spend in the categories increase at a healthy rate among Boomers and Gen X.
See the scorecard for a summary of the confidence measures and a comparison to the other more widely followed measures of confidence.
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 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—which is a stark contrast to the clearer picture from the spending confidence measures.
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