Many Hold Spending in Check, Say Economic Indicator’s Rosy Report Doesn’t Match Their Metrics
Thomson Reuters/University of Michigan Consumer Sentiment Index
U.S. consumers are feeling pretty good right now — as good as they have since the pre-recession days of July 2007, according to one recently released key measure. But many marketers are unconvinced that the so-called new normal is about to be replaced by the old ebullience.
The Thomson Reuters/University of Michigan Consumer Sentiment Index posted a nearly six-year high this month. Its increase since November 2011 is stronger than any since the early 1980s, when the U.S. emerged from back-to-back recessions.
History shows the index is not to be taken lightly. It accurately predicted the last five recoveries and last two recessions (lagging behind the prior three it didn’t predict). Nor is it alone in flashing green. The Dow Jones Industrial Index recently reached a high. The unemployment rate, while still a steep 7.5%, has been steadily declining. And housing starts rebounded the past year, particularly in recession-ravaged California. All this comes despite a 2% hike in the payroll tax and federal budget cuts in recent months.
So why aren’t marketers jumping for joy? Many have other metrics on their minds.