Consumer optimism

High price inflation has weighed on US consumers’ spending power. In a recent YouGov survey 25% of respondents said they had seen their household’s financial situation worsen. In the same survey, 56% of respondents said they had seen no change and 19% reported an improvement. That’s looking at the past, but how are consumers feeling about their household’s financial situation in the year ahead? There is remarkable optimism: 54% expect an improvement, 26% no change and 19% a worsening. Some of that may have to do with economic factors such as the labor market being strong, inflation gradually coming down, and wages growing ahead of inflation resulting in higher purchasing power for a lot of consumers. Meanwhile, house prices and the stock market have continued to climb, resulting in a positive wealth effect for households possessing these assets. The upcoming change in government might also contribute to renewed optimism among a large chunk of consumers.

Source: YouGov, November 2024.