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Consumer confidence declined only a fraction of a point in the latest reporting from NPD Group’s Economy Tracker, and intent to spend at retail remains steady. This may indicate that consumers have reached their cost cutting limits.
The tracking study indicates consumers’ perception of the economy decreased by a fraction to 36.5 in March, from 36.7 in February. “With the indicator off only a fraction of a point, consumers’ perception of our economic situation is virtually unchanged from last month,” said Marshal Cohen, NPD chief industry analyst.
The Economy Tracker measures consumer concerns regarding the economy on a scale between 0 and 100, with 0 being “Very Concerned” and 100 being “Very Confident.”
Consumers did not reduce their spending intentions. The Economy Tracker’s Retail Response Indicator was up 0.5 points in March. “This slight rise could be an indication that we are seeing the beginning of stabilization,” said Cohen.
The Retail Response indicator measures consumer spending intentions on a 0 to 100 scale, with 0 representing “Reduce or Spend Less” and 100 representing “Spend More.”
“Despite continued news about economic challenges and the tough jobless numbers March brought, I am encouraged that consumers aren’t saying they’ll cut spending further. I believe that consumers have reached the point where they’ve cut as much as they can and just need to replenish. Consumers are telling us they are thinking about spending again, but spending with caution," Cohen observed.
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