This month’s data indicates the fragility of the economy. Retailers might be expecting a back-to-school sales bump, but after showing some promise of improvement last month, retail activity has retreated, showing declines versus one year ago.
Yonkers, NY (PRWEB) August 07, 2012
The Consumer Reports Index, an overall gauge of consumer personal financial health, showed that Americans’ retail spending in the past month declined slightly. But compared to a year ago, purchases registered a sharp decline, indicating that retailers may be in for disappointing back-to-school sales this year.
“This month’s data indicates the fragility of the economy. Retailers might be expecting a back-to-school sales bump, but after showing some promise of improvement last month, retail activity has retreated, showing declines versus one year ago,” said Ed Farrell, director of Consumer Insight at the Consumer Reports National Research Center.
The Consumer Reports Index’s past 30-day retail measure wavered slightly this month, dropping to 9.4 from 9.9 last month, but is well behind what it was at the same time one year ago (12.0). Planned purchasing over the next 30 days (8.8) was virtually unchanged from last month (8.6), but also lags last year (9.3). Specific categories that saw a drop in the planned purchasing measure include common back-to-school products such as personal electronics, which dropped to 16.5 from 17.7 the previous month, and small appliances, which dropped to 12.2 from 12.7 last month.
The Consumer Reports Index’s overall sentiment measure dipped into negative territory this month, to 49.5 from 53.1 the prior month. The decline was most pronounced among Americans earning less than $50,000, falling to 44.0 from last month’s 50.9.
Despite the drop in Americans’ overall sentiment, the Consumer Reports Index’s Trouble Tracker measure, a gauge of financial difficulties faced by consumers, fell this month to its lowest level since first measured in April 2009, to 39.8, from 41.8 last month. Behind this overall decline, the rift widened between lower- and upper-income Americans. The Trouble Tracker measure increased for those in households earning less than $50,000 to 64.7 from 58.9 a month earlier, while financial difficulties continued to decline for those earning $100,000 or more.
The Consumer Reports Index’s employment measure softened this month and also declined into negative territory at 49.9 from 50.9 last month. Though more Americans lost versus started jobs this month, the proportions are in near balance, 5.0% versus 4.9%, respectively.
“Overall the economic picture indicates a slight softening and a widening gap between lower- and upper-income Americans. The employment outlook is still troubling, with near stagnation in job gains being offset by job losses,” said Farrell.
The Consumer Reports Index report, available at ConsumerReports.org, comprises five key measures: the Sentiment Index, the Trouble Tracker Index, the Stress Index, the Retail Index and the Employment Index.
The Consumer Reports Index, conducted by the Consumer Reports National Research Center, is a monthly telephone and cell phone poll of a nationally representative probability sample of American adults. A total of 1,017 interviews were completed (767 telephone and 250 cell phone) among adults aged 18+. Interviewing took place between July 26 and July 29. The margin of error is +/- 3.2 percentage points at a 95% confidence level.