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Actual retail spending for December modestly higher than last season; new cars see a boost
Yonkers, NY – Consumers report they are more optimistic, with sentiment numbers climbing to their highest level in more than two years, while Americans claims to be facing fewer financial difficulties than they did one year ago, according to the Consumer Reports Index for January.
The Consumer Reports Sentiment Index (48.7) is up from the prior month (45.1), from one year ago (44.1), and is at its highest level recorded since October 2008.
“Some of the rise can be attributed to the seasonal January jump, but not all of it. Overall, consumers are feeling better about their financial situation and hopefully this will translate into increased economic engagement in 2011 if this trend continues,” said Ed Farrell, a director of the Consumer Reports National Research Center.
Consumers are facing fewer financial difficulties than they did one year ago. The Consumer Reports Trouble Tracker Index (54.2) is down from last January (58.2). In recent months the Trouble Tracker Index has crept upward, pointing to increasing financial difficulties for consumers. January’s Consumer Reports Trouble Tracker Index stands at 54.2, up from 52.7 the prior month and from its recent low in November (49.3).
As the holidays recede, the Consumer Reports Stress Index, a measure of the stress consumers feel in their everyday lives versus a year ago, is down significantly in January to 55.4 from 60.8 the prior month and from one year ago (69.0). Beyond the expected seasonal drop, consumer stress is now at its lowest level since this measure was tracked beginning in April 2009. Though stress is still elevated (above 50) there has been a real improvement among consumers.
Consumer retail spending for December showed modest gains versus one year ago. The Consumer Reports Past 30-Day Retail Index (reflecting December activity) came in at 15.4, up slightly from 14.1 last year despite, consumers’ expressing hesitancy to spend in last month’s index. December’s gains were closely associated with the performance of major home electronics. One-fifth of respondents (20.8%) purchased major home electronics in December, up significantly from last year (15.8%).
Some of December’s retail gains were borrowed from January and the out-months. The Consumer Reports Next 30-Day Retail Index for January, reflecting January’s activity, is 8.3, down slightly from one year ago (8.9), with personal electronics and major home appliances the hardest-hit categories.
The Consumer Reports Index report, available at www.ConsumerReports.org, comprises five key indices: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index, and the Employment Index. Here are the key findings:
Consumer Reports Sentiment Index: 48.7*
* The Consumer Reports Sentiment Index captures respondents’ attitudes regarding their financial situation, asking them if they are feeling better or worse off than a year ago. When the index is greater than 50, more consumers are feeling positive about their situation. When it is below 50, more consumers are feeling worse. The Sentiment Index can vary from a high of 100 to a low of 0.
Consumer Reports Trouble Tracker Index: 54.2*
* The Consumer Reports Trouble Tracker focuses on both the proportion of consumers that have faced difficulties as well as the number of negative events they have encountered. The negative events include: the inability to pay medical bills or afford medication, missed mortgage payments, home foreclosure, interest-rate increase, penalty fees, reduced lines of credit or other changes in credit-card terms, job loss or layoffs, reduced health-care coverage, or the denial of personal loans. The Consumer Reports Trouble Tracker Index is then calculated as the proportion of consumers that have experienced at least one of the negative events comprising the index multiplied by the average number of events encountered.
Consumer Reports Retail Index: Past 30-Day 15.4, Next 30-Day – 8.3*
* The Consumer Reports Retail Index looks at consumer purchases in the past 30 days as well as the outlook for planned purchases in the next 30 days across several categories. The Consumer Reports Retail Index represents the proportion of respondents that made a purchase in the following categories: major home appliances, small home appliances, major home electronics, personal electronics, and major yard and garden equipment. The Retail Index is a weighted calculation. For example, a major appliance is of greater value than a small appliance. Because of their size and frequency, car and home purchases are tracked separately.
Consumer Reports Employment Index: 49.2*
* The Consumer Reports Employment Index examines the change in employment of those that reported starting a new job versus those that have lost their job or were laid off in the past 30 days. An index below 50 indicates more jobs were lost than gained, while a score more than 50 indicates more jobs were gained than lost in the past 30 days.
Consumer Reports Stress Index: 55.4*
* The Consumer Reports Stress Index captures attitudes regarding the amount of stress consumers feel compared to a year ago. It asks whether they are feeling more stressed or less stressed. When the Stress Index is more than 50, consumers are feeling more stress and when it is below 50 they are feeling less stress compared to a year ago. The index can vary from 100 (Total Stress) to a low of 0 (No Stress).
For more information regarding the Consumer Reports Index, visit www.ConsumerReports.org.
About The Consumer Reports Index
The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,259 interviews were completed (1,009 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between January 6th and January 9th, 2010. The margin of error is ± 2.8 points at a 95% confidence level.
TopicsConsumer Reports, Consumer Sentiment Index, Consumers, Ed Farrell
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