Retail Outlook: Spring 2015 Update
Less Affluent Consumers are Feeling Better But Aren’t Ready to Splurge
Consumers Are Finally On the Mend
The U.S. recovery has been widely criticized as being too limited in its reach and that is a fair comment. While corporate earnings and financial asset values have rebounded strongly since 2010, measures of economic health that have greater impact on the masses, namely jobs and income growth, have been disappointing. Consumer surveys throughout the recovery revealed that too many respondents were not seeing the benefits of this expansion. That prevailing view began to change in mid-2014.
Consumer sentiment, as measured by the University of Michigan, is near an eight-year high but more noteworthy is that less affluent households are feeling more confident these days with respect to their finances and economic prospects. It has taken much longer this time around than in past recoveries for confidence to rebound among lower income groups. The significance of this shift should not be overlooked.