Consumer Spending Update: Economic Confidence Takes a Hit in the New Year
Friday, January 11, 2019
Following a rocky few months on Wall Street and the partial government shutdown at the end of December, consumer confidence struggles to keep up the enthusiasm felt throughout 2018.
The Rasmussen Reports Economic Index dropped to 129.7 in January, down eight points from last month and the lowest finding since November 2017.
Enthusiasm about the economy started to grow immediately following Donald Trump's election as president in November 2016 and spiked to 145.9 last February. By comparison, in President Obama’s final years in office, this index reached a high of 121.5 in January 2015 and was at 108.1 his last month in the White House.
Fifty percent (50%) of American Adults rate the economy positively this month, down six points from last month and the lowest since December 2017. This finding includes 20% who say the economy is in Excellent shape. Just 15% now rate the economy as Poor.
Thirty-five percent (35%) say the economy is getting better, down three points from last month and the lowest since November 2017. Thirty-nine percent (39%) anticipate a worsening economy, up eight points and the highest finding since Trump took office. One-in-five (21%) say the economy hasn’t changed. By comparison, just prior to the 2016 presidential election, 31% rated the economy as good or excellent, and just 26% expected it to get better.
Half (50%) of Americans continue to have a positive view of their personal finances, in line with findings throughout the year. Just 15% continue to rate their own personal finances as Poor.
Thirty-six percent (36%) expect their finances to continue getting better, while 30% expect them to get worse. This is the first time since November 2016 that those who expect their personal finances to worsen has risen to the thirties.
Economy and personal finances were not the only thing to take a hit this month. The Consumer Spending Index dropped five points to 103.6, the lowest since last January.
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The survey of 1,500 American Adults was conducted on January 2, 2019 by Rasmussen Reports. The margin of sampling error is +/- 2.5 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.
As the 2018 holiday shopping season approached, 28% of Americans anticipated spending more on gifts than in 2017. Thirty-four percent (34%) planned on spending less, and 32% said they would spend about the same amount.
Now, just 19% now expect to spend more in the month ahead, down ten points from last month. While it’s not uncommon for this month-over-month finding to show such a drop from December to January following the holiday shopping season, this is the lowest finding in four years of surveying.
Anticipated spending on clothing, footwear and accessories will see the biggest loss in the month ahead, with just 11% saying they plan on spending more in that category than in December. One-in-three (36%) say they’ll spend less, up nine points from last month but in line with month-over-month increases following the holidays in previous years.
Roughly one-in-ten Americans expect to spend more on household items (10%) and entertainment (9%) in January. Seventeen percent (17%) expect to do more spending on household improvements, unchanged from the last two months.
Entrepreneurs are the most confident in the current state of the economy and their own personal finances and the direction of both.
Individuals who are married are more confident about the economy and personal finances than unmarried couples.
Americans had faith at the beginning of 2018 that it would be a good year, and now they say it turned out to be an even better one than the last several. They are feeling pretty good about the year to come, too, although though not quite as good as in years past.
Thirty-seven percent (37%) of Likely U.S. Voters think the country is heading in the right direction, down two points from last week and the lowest since early March.
Americans think Democratic candidates are more likely to include lower-income folks in the middle class than Republicans are. GOP candidates are more likely to view higher-income Americans as middle class.
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