US consumer expectations for the economy and job market improved somewhat in May 2010, according to results of a new Harris Poll.
Overall Economic Expectations Stay Flat
Consumers’ overall expectations for the performance of the economy in the coming year remained virtually flat between April and May 2010. Thirty-eight percent of consumers said the economy will improve in the coming year (compared to 39% in April 2010), while 34% said it will stay the same (compared to 35% in April 2010) and 28% said it will get worse (compared to 26%).
Household Expectations Edge Upward
When asked to evaluate how their household economic condition would fare in the next six months, consumers were slightly more optimistic. Twenty-five percent said it will improve (compared to 21% in April 2010), while 47% said it will stay the same (compared to 50% in April 2010) and 28% said it will get worse (compared to 29% in April 2010).
South Most Optimistic about Jobs
While the overall view of the job market is pessimistic, the South has more optimism than other regions of the US. In total, a net 12% of consumers think the current job market is good, while 68% think it is bad and 20% think it is neither good nor bad.
Broken down by region, 18% of consumers in the South think the current job market is good and 63% think it is bad. Conversely, Midwestern consumers are the most pessimistic, with only 6% thinking the current job market is good and 75% thinking it is bad.
Total figures improved slightly from April 2010, when 10% of consumers thought the current job market was good, 70% thought it was bad, and 20% thought it was neither good nor bad.
Consumers Set to Decrease Spending
Despite the slight improvement in expectations for household finances and the job market, a majority of consumers indicate they will be spending less in the next six months. Sixty-four percent of consumers are likely to decrease spending at restaurants, 62% are likely to reduce spending on entertainment, and only 36% are likely to take a vacation away from home lasting more than a week.
The likelihood of spending money for big-ticket purchases, such as new computers (20%), new autos (12%), houses/condos (7%), and boats/recreational vehicles (3%) is even lower. In addition, 52% of consumers are likely to save or invest more money in the next six months, while only 27% say it is likely they will have more money to spend any way they want.
Consumer Situation Improves
Consumer employment, finances, spending and stress all showed signs of improvement in May 2010, according to the Consumer Reports Index. The Employment Index, which examines the change in employment of those that reported starting a new job, compared to those that have lost their job or were laid off in the past 30 days, rose in May 2010 after entering positive territory the previous month for the first time since May 2009.
In addition, after remaining virtually flat at 43.7 the prior month, the Consumer Sentiment Index, which measures financial optimism, edged up in May 2010 to 44.6, and the Next 30-Day Retail Index, which reflects the purchases consumers plan to make in June 2010, was at 9, up slightly from 8.3 the previous month. Furthermore, the Consumer Reports Stress Index was 59.6 in May 2010, down from both 63.8 in April 2010 and 62 in May 2009.
About the Data: This Harris Poll was conducted online within the US between May 10 and 17, 2010 among 2,503 adults (aged 18 and older). Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
