Poll shopping for consumer confidence
Retail: Survey says holiday spending will be low
BY DEBBIE BLOSSOM
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Published: November 4, 2009
The latest Oklahoma City University consumer confidence poll of 700 middle America households provided some encouraging signs, although many remain cautious about the fragile economy.
Consumers were asked about their response to everything from buying homes and bigger-ticket durable goods to whether the stock market has affected lifestyles and how they view next year.
More people believe they are worse off financially than last year, said
Steve Agee, director of the Economic Research & Policy Institute at the university’s
Meinders School of Business and board member of the
Oklahoma City Branch of the
Federal Reserve Bank of Kansas City.
But although overall consumer sentiment and consumer expectations are up from last fall. Those expecting conditions to be better next year rose from 26 percent to 35 percent.
"That is pretty striking,” he said.
And the market for potential home buyers appears good.
The number of people who said it is a good time to buy a home is up — from 58 percent in 2008 to 70 percent now. And 44 percent of households said it’s a good time to purchase durable goods, up from 34 percent last year.
Those are good signs, Agee said, and aspects economists look at when evaluating consumers’ state of mind. Purchases of big-ticket items, such as cars and appliances, "are a stronger measure than food and services,” he said. "This tells us there is improved confidence in buying goods.”
Less positive was an overall view on discretionary spending.
In response to stock market changes, 59 percent said they have cut spending this year compared to 46 percent who said that last year.
"That’s kind of what we were expecting,” Agee said, a trend that had 61 percent of those polled saying they would spend less on the holidays this year. "And that’s not good for retail sales.”
Fueling most of the fears is what’s now being called the "jobless recovery.”
The economy is beginning to improve, "but the jobs aren’t returning,” Agee said. And at recent
Federal Reserve meetings in
Washington, economists there say it could be five or six years before unemployment drops back to 6 percent, he said.
The OCU poll helps differentiate this part of the
United States, which entered the recession later and hasn’t stumbled quite as badly, said
Chad Wilkerson, executive of the Oklahoma City branch of the Federal Reserve Bank of Kansas City.
"This survey gives a clear read on consumer spending and retail spending, which is another piece of the picture on what we are doing,” Wilkerson said.
Nationwide, consumer confidence is faltering, private industry group The Conference Board said. Its latest survey showed U.S. consumer confidence that dipped in September deteriorated further in October, a result of grim labor market conditions.
Consumers also remain pessimistic about future earnings, a sentiment that will likely constrain spending during the upcoming holidays, the board’s consumer research center director said.
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