June 3, 2005, 12:00 AM

Consumers are in a spending mood, says Retail Forward’s monthly survey

Consumers are in a spending mood, according to the latest Future Spending Index from Columbus OH-based retail consultants Retail Forward Inc. The Future Spending Index increased to 99.1 this month from 96.6 last month.

Consumers are in a spending mood, according to the latest Future Spending Index from Columbus OH-based retail consultants Retail Forward Inc. The Future Spending Index increased to 99.1 this month from 96.6 last month.

“Despite fears that consumers are finally throwing in the towel, this month’s results show that consumers’ desire to shop remains intact,” says Steve Spiwak, economist with Retail Forward. “Job growth, home buying and the recent stock market run up are providing a solid foundation for near-term spending prospects.”

Retail Forward says Father’s Day spending will contribute to the expected boost in buying this month, especially among more affluent households. Retail Forward’s survey of shoppers, ShopperScape, reports that the strong housing market is pushing home improvement project spending higher, with do-it-yourselfers driving much of that spending.

Retail Forward also reports:

• The June Future Spending Index for Middle Market households (incomes between $22,500 and $75,000), which account for nearly half of overall consumer spending, rose to 100.1 from 93.9 in May. This income segment is much more optimistic about the job situation and income growth. Moreover, the recent drop in mortgage rates has bolstered home buying and refinancing activity for this income group, providing added confidence to spend.
• Heightened optimism about jobs and incomes along with an increase in investment worth balanced greater debt concerns and a falloff in home buying for Up Market households (incomes greater than $75,000). As a result, the index for this income group was essentially unchanged at 97.2 in June.
• The index for Down Market households (incomes less than $22,500) moderated a bit to 101.1 in June compared with 102.3 the month before. The volatile job market recovery is taking a disproportionate toll on this segment, though a jump in refinancing activity and investments cushioned the June falloff.

Retail Forward conducts its ShopperScape survey each month with a sample of 4,000 U.S. primary household shoppers. The June survey was conducted during the last week of May.

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