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A monthly survey of shoppers’ intentions from consultants Retail Forward Inc. reports that consumers’ spending expectations took a slide in August as buyers worried about job security, the high price of gasoline, and rising short-term interest rates.
Retailers were disappointed by their August sales and a survey of consumers’ spending plans gives little encouragement that there will be an uptick soon. A monthly survey of shoppers’ intentions from consultants Retail Forward Inc. reports that consumers’ spending expectations took a slide in August as buyers worried about job security, the high price of gasoline, and rising short-term interest rates.
Retail Forward’s Index of Future shopping stood at 101.1, the lowest level since the index was started last December at a baseline of 100. It had stood at 104.7 in July and 105.8 in June.
Middle market ($22,500 to $75,000 in annual household income) consumers’ shopping index fell from 103.4 to 100.8. “Debt loads also became more of a concern, tempering the spending outlook. But home buying in this cohort remained strong and refinancing activity nudged higher. This suggests persisting buoyancy in spending among middle market households, which account for the biggest share of consumer spending,” Retail Forward reported.
Higher income households’ spending index slipped slightly to 101.5. “Persisting stock market weakness is the key driver of that falloff, though a slight weakening in assessments of jobs and incomes contributed,” Retail Forward said. “Home buying rebounded strongly in this segment, cushioning the falloff.”
The lower income index fell the most, dropping from 112 in July to 101.3 in August. “The combined impact of heightened job and income worries and weightier debt burdens produced that decline,” Retail Forward said. “But home buying and refinancing jumped to a four-month high, which softened the impact.”
Retail Forward reported that 40% of consumers are limiting their gasoline consumption. A significant portion of consumers is concerned about high interest rates, although Retail Forward reports that the impact of higher interest rates has been mitigated by gains in income.