Spending confidence sagged in December amid uncertainty about tax reform effects—especially among Gen X and Boomer households, who make up the bulk of affected tax payers.
Millennials were the encouraging exception. Their confidence to spend over the next 90 days continued to rebound from a June low point reached after sliding steadily through the 2016 presidential election.
The December drag on confidence may prove a temporary setback like September’s post-hurricane impact. If so, then the otherwise healthy trend may still yield a good start to spending in the New Year.
Meanwhile, the spending trend will continue to be marked by generational differences by category—even as e-commerce is favored over spending at stores:
- Health & beauty. The weakest confidence to spend in December was found in the health and beauty category and it was especially weak in a key generation. See the report below for more.
- Clothing. Clothing also took a big hit to confidence to spend in December, which was focused in two important generational groups. See report below for more.
- Food & grocery. This category benefited from a sizeable boost in confidence to spend in a key generation in December—although overall category spending confidence barely held steady. See the report below for more.
- Homegoods. Confidence to spend on homegoods in December diverged between stronger confidence among one key group and weaker confidence among another. See the report below for more.
- Electronics. Electronics remains the strongest category compared with a year ago in terms of confidence to spend, although the month-to-month change was mixed in December. For more, see the report below.
- Leisure goods. Confidence to spend on these goods—including sporting goods, toys, music, and videos—saw a big drop among a key generation in December. See the report below for more.
These are among the takeaways from data through December from the Spending Confidence Index™, which is the proprietary index of consumer sentiment created by MacroSavvy™ based on data from Prosper Insights and Analytics™.
For more background about the Spending Confidence Index™ and its components, the white paper at this link explains why the new index is an improvement over existing measures of confidence.
For more detail on spending confidence and what it means for the outlook, see the select products below or the full product and subscription options here: