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NEW YORK and CHICAGO – Americans are feeling more confident these days, putting the Great Recession in their rear-view mirrors, according to new studies from researchers Nielsen and IRI.
U.S. consumer confidence increased four index points in the second quarter of 2014 to a score of 104, continuing the upward trend that began in the first quarter of 2013, according to the latest Nielsen Global Survey. Still, spending levels at retail remain below where they were before the Great Recession.
“In the U.S., positive news for the job, housing and equity markets appears to have buoyed the spirits of Americans,” said James Russo, senior vice president, Global Consumer Insights, Nielsen. “The retail environment for non-durable goods, however, is still catching up."
Retail dollar sales of fast-moving consumer goods were up 1.3 percent in the latest six months ended in June. "Consumers are moving ahead slowly and marketers need to adjust to a new consumer mindset of restraint, which will take time to reverse,” Russo added.
Nearly half of Americans (49 percent) believe now is a good/excellent time to spend — the highest level reported since 2006 and up 6 percentage points from first-quarter 2014 (43 percent). Optimism about job prospects and personal finances rose in the second quarter as well.
Intentions to spend are at the highest level in the United States since before the Great Recession (49 percent), the Nielsen study found, yet 62 percent of Americans indicated that they continue to deploy strategies to save on food, entertainment and household expenses.
Meanwhile, IRI in its latest MarketPulse survey characterized the current mood of consumers as "optimism with a pinch of skepticism." The IRI study showed consumer confidence as relatively flat in this year's second quarter after dramatically increasing in the first quarter of 2014.
Sixteen percent of consumers say they feel “a little better” about their current financial situation, compared to 13 percent in the second quarter of 2011, the first year IRI began conducting the MarketPulse survey. In addition, the skeptics are becoming fewer in number. This quarter, 22 percent indicate they feel “a little worse” vs. 25 percent in Q2 2011, and 13 percent say they feel a “lot worse” vs. 15 percent in Q2 2011.
Those who feel “a lot better” remain flat at 3 percent, while 46 percent this quarter say they feel "the same," compared to 43 percent during the same time period in 2011.
“Even though the economy is gradually rebounding, consumers are cautiously optimistic about their financial health,” stated Susan Viamari, editor, Thought Leadership, IRI. “We are seeing the ranks of those consumers who are experiencing and even expecting economic improvement slowly beginning to rise."
Of particular note, she said, are Millennials who have suffered more and longer than others, and are reporting they have been feeling more comfortable for the last two quarters.
"Time will tell, but, for now, this indicates that the stabilization of the economy is reaching a bit deeper across consumer segments,” Viamari added.
IRI’s newest MarketPulse survey also shows cutbacks are still widespread, but the stronghold is easing a bit. Sixty percent of consumers are cutting back on non-essential items, and 47 percent report buying more private label products than in the past. Additionally, 46 percent are trying new brands priced below regular brands, and 39 percent are giving up some of their favorite brands.
“A critical takeaway from our latest MarketPulse survey is that, while optimism is emerging, consumers’ continued commitment to find maximum value is as strong as ever,” Viamari concluded. “One-third of consumers tell us that they will continue to shop multiple stores to find the lowest prices.”