Knowing what consumers can and can not do or willing to do delivers you the pacing on how your local ad dollars will take shape. With drivers topping off their fuel tanks at a current $4.10/gal (source: AAA), spending on other goods continues to suffer.
Although confidence flatlined in July, expectations for the U.S. employment environment continued to sour…62.3% now contend that layoffs will continue to increase, up from 61.6% last month and a new high. About a third (31.2%) predicts they’ll remain the same (flat with 31.4% last month), while a scant 6.5% hope for fewer (v. 7.0%). Personal concerns with becoming laid off remain relatively stable…6.0% fear the pink slip, compared to 6.2% in June.
With the majority (54.8%) feeling less wealthy than they did one year ago, conservatism is the name of the game as consumers attempt to balance their budgets…for the second consecutive month, decreasing overall spending is the financial priority (39.2%) over paying down debt (35.3%), rising 10 points from 29.3% a year ago. An increasing number of consumers also plan to increase savings (26.9%) and pay with cash more often (23.8%).
With the Dow sliding below 12K at the end of June, bearish investors are more hesitant to take their money to Wall Street…fewer than half (47.8%) contend they would definitely or probably invest in the stock market, down three points from June (50.6%). However, a few bulls may remain…investors planning to buy stocks increases slightly to 9.9% (from 9.5% last month), while only 4.8% plan to sell (v. 5.2%).
With drivers topping off their fuel tanks at a current $4.10/gal (source: AAA), spending on other goods continues to suffer…among the 84.9% currently affected by gas prices, almost half (46.9%) say they’ve cut back on dining out, up from 30.8% one year ago (when gas prices were “only” fluctuating around $3.00/gal). Drivers are also making spending reductions on vacation/travel (45.5%), clothing (39.5%), high-dollar durables (30.9%), and groceries (27.8%) to cope. As pump prices escalated from $2.00/gal in 2004 to $3.00/gal in 2007, spending cutbacks on vacation, dining out, and groceries remained relatively stable. However, crossing the $4.00/gal mark in 2008 appears to be the straw that broke consumers’ back pockets:
The vast majority of consumers (82.7%) are bracing for even higher budget-busting prices at the pump come August 1…only 15.0% contend they’ll remain at current levels, while a minor few (2.4%) are holding out for a decrease. Consumers are predicting an average price of $4.44/gal early next month, rising from the $4.39 expected on Independence Day (which – whew! – was overestimated).
(source: Big Research, July 2008 (Respondents Surveyed 7/1 – 7/8/08) http://www.bigresearch.com/)
