Consumer sentiment reaches highest level since 2008
Americans are feeling significantly better about their personal finances, according to the monthly Consumer Reports Index. Consumer sentiment rose 8.8 percent to 54.5, the highest level in more than five years. The broad-based increase crossed all income and education groups; the greatest gain was among consumers in households earning less than $50,000.
“It has been a real positive month for a lot of Americans,” says Ed Farrell, director of consumer insight at the Consumer Reports National Research Center. “While the recession has had a long tail that continues to burden lower-income families disproportionately, improving sentiment among that group indicates that they are starting to feel better about the days ahead.”
Even with improving consumer sentiment and declining financial difficulties–which dropped to 41.7 from 42.3–Americans are still pulling back on spending.
“With the roller-coaster ride that has defined the consumer’s experience of the recovery, hesitancy to spend may be a rational outcome. It’s likely to take several months of improving prospects and a strengthening job outlook before consumers fully engage,” Farrell says. (Employment dipped to 50.3 from 50.8, with the overall number of Americans starting a new job falling slightly.)
The Consumer Reports Index, a monthly telephone poll of a nationally representative sample of Americans, is conducted by the Consumer Reports National Research Center. It comprises five measures: Employment, Retail, Sentiment, Stress, and the Trouble Tracker. A total of 1,008 interviews were completed from April 25-28. The margin of error is +/-3.2 percentage points at a 95 percent confidence level.
Last month: Retail spending declines, but Americans plan to spend more in April