Consumer confidence and spending in the US began slowing as early as spring 2007, especially among middle- and upper-income Americans, according to a recent analysis by Experian Marketing Services, based on data from Experian units Simmons and Hitwise, reports Retailer Daily.
From spring 2007 to summer 2008, the percentage of US adults who felt they would be financially better off in the next year dropped 11 percentage points, from 46% to 37%.
Moreover, the number of adults who felt they would be worse off in the coming year grew 9 percentage points, to 22%.
The analysis, which compared the self-reported economic confidence and spending habits of adult Americans along with online site traffic and searches on major purchase items, revealed consumer behaviors to be a strong indicator of a downturn months before the current economic crisis.
“Our data shows a clear indication that the preferences and behaviors of consumers trended toward a slowdown well before the economic woes experienced over the past few months,” said Joe Paulsen, general manager of Consulting and Analytics for Experian Marketing Services.
The analysis also found as follows:
- Households earning $250,000 or more were the fastest to abandon the notion they would be somewhat or significantly better off in the coming year, dropping by 40% from Spring 2007 to Summer 2008.
- Middle- and upper-middle-income Americans (incomes ranging from $50,000 to $249,000) had the largest declines among those who planned to purchase big- or medium-ticket items within the next month, falling nearly 25%.
- From October 2006 to October 2008, overall visits to retail websites slowed, with a 4% year-over-year decline.
- During the same time period, overall visits to websites in the travel category were down 10% year over year.
- Online searches for major electronic items had significant year-over-year decreases, with “televisions” down 33%, “laptops” down 48%, and “computers” down 57%.
- While online interest in big-ticket purchases decreased, visits to grocery websites were up 29% and visits to coupon sites were up 27%.
More data is available from Experian (pdf).
