Insights from the August BIG Call – Confidence & Employment
This month, I will be reviewing the latest big insights on confidence, practicality, and personal finances, as well as our BIG Forward look.
Consumer Intentions & Actions: August
- The August Consumer Intentions & Actions survey was collected August 2nd through the 9th and includes the thoughts of more than 8,600 consumers.
- We’ll be taking a look at:
- Consumer Confidence;
- The Employment Outlook;
- Practical Purchasing, including Focus on Necessities;
- A few great questions on Personal Finances;
- Finally, we’ll take a BIG Forward Look with 90 day purchase plans.
I’ll start off here by pointing out the obvious in this chart – Consumer Confidence fell off a cliff in August.
This month, only one in five is very confident or confident in chances for a strong economy, the lowest reading in more than two years. Back in March 2009, confidence was at 19.5%. This month’s reading also represents a 22% drop from July.
The decline in confidence this month appears to be at least partially politically motivated. At the time the August survey was collected, the Debt Crisis was the top news feed. And this month, 24% indicated they worry more about political or national security issues, which was our highest reading since January 2010.
Now take a look at confidence over the years.
As you can see, this month’s reading is the lowest August reading going back to 2003.
Back in August 2008, just before the bank failures that solidified the recession for consumers, confidence was three points higher, at 23.6%. In a “good” economy, we’d expect confidence levels in the 40% range.
It’s a pretty well-known fact that lower unemployment is the lynchpin for the basis of solid economic recovery. With unemployment at 9.1% currently, the foundation for recovery is still not set. Consumers know this, and they worry about this, which is evident from this month’s data.
In August, two in five consumers felt that we would see “more” layoffs over the next six months. This represented a 40% increase from the sentiment a year ago. Declining confidence, the debt mounting on Capitol Hill, sliding stock market, and general disdain for the lack of improvement in the unemployment rate likely contributed to this dramatic increase. About half of consumers feel that layoff levels will remain the same…and let me remind you that more of the same means sticking with a 9% official unemployment rate. Only one in ten see improvement in the future for the employment situation…that’s almost half the number of people who felt this way one year ago.
Stay tuned for my next post–I’ll be looking into personal finances and spending plans!!