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CHICAGO -- U.S. consumers are getting more comfortable with spending, according to new research from Mintel.
The Chicago-based market research firm's annual comparative audit report, American Lifestyles 2014, suggests that renewed consumer spending is now in line with pre-recession trends, and consumer optimism is higher than it's been in years.
In 2013, Mintel estimated that personal consumption expenditures on consumer goods reached $10 trillion for the first time. The outlook for 2014 continues the positive trend, with spending expected to increase further by 3.6 percent -- more than three times the projected rate of inflation for the year.
Just one in 10 Americans currently say they don't spend their extra money and instead save it. A similar number say they "never" have any extra money. These stats are in sharp contrast to 2013 and 2008 when the Mintel survey found that the share of savers was at least double. In addition, those consumers who say they "never" have any extra money has declined from 15 percent in 2008 to 12 percent in 2014.
"In 2014, it appears that America has finally stopped holding its collective breath, waiting for the other economic shoe to drop," said Fiona O'Donnell, category manager, multicultural, lifestyles and leisure at Mintel. "After five years of slow but steady growth, Americans have passed the tipping point of prolonged economic worry and have cautiously accepted that things are better. Confidence in personal finances has allowed consumers to think about the future and look forward rather than linger over the past."
According to Mintel, total U.S. consumer expenditures will grow by 20 percent from 2013-2018 to reach $12 trillion. In comparison, expenditures increased just 15 percent from 2008 to 2013 (with a 1.5-percent decline in 2008-09).
Over the course of one year, the share of respondents who said they spend extra money on vacations nearly doubled. This is the greatest gain for any one area of consumer spending and is a sign of improved finances -- or at least consumer optimism.
"One of the common themes noted across different sectors examined in the report is that optimism is a hallmark of youth," O'Donnell said. "Adults aged 18 to 24, in particular, are looking at the world around them and see all the possibilities ahead. Owing in part to social media and the ability to share instantaneously with others, young adults are placing a higher value on 'experiences' as opposed some of the more traditional purchases of their parents' generation.
"A desire for experiences over stuff -- coupled with a record number of Baby Boomers reaching retirement -- has seen expenditures on categories such as dining out, vacations, leisure and entertainment, and alcohol outpace spending overall. This is a trend that is expected to continue over the next five years," she added.
Along with renewed optimism about the economy, Americans are also focused on self-improvement this year. Top goals for 2014 include increased family time (88 percent), healthier diet (88 percent), exercising more (87 percent), getting household finances in order (84 percent), achieving a better work/life balance (82 percent) and taking care of personal appearance (81 percent).
"An improved personal financial situation has allowed many to expand their focus from simply keeping up with the bills to looking more widely at what goals they would like to accomplish," O'Donnell said. "Improving personal health through diet and exercise are key areas where Americans are looking to make positive changes, and with less mental energy expended on financial worries, they are in a better position to make these aspirations a reality."
According to Mintel, the categories that appear poised to show the greatest gains over the next five years are leisure and entertainment (up 28.5 percent), vacations and tourism (up 27.3 percent), technology and communications (up 25.2 percent) and alcohol on premises (up 23.7 percent).