by According to the latest findings from the ConsumerWise group, a consumer concern about inflation dipped slightly from the previous quarter, which helped consumer optimism hit its highest level in almost two years.
Even so, the group was quick to explain that although U.S. consumers reported feeling less pressure to save for what it called “an eventual rainy day,” 20% of those consumers said they were still pessimistic about the economy.
The group said that after an end-of-year stock market rally and after seeing some signs of price stabilization, U.S. consumers expressed a more positive outlook on the economy in February compared with the previous quarter.
Consumers, the group added, also felt optimistic given labor market resilience and historically low unemployment.
The team at ConsumerWise pointed out that, despite the improved macroeconomic outlook at the beginning of the month when the survey was conducted, more recent inflation data shows consumer prices are still climbing at a rate higher than the U.S. Federal Reserve’s inflation target.
Consumers indicated they plan to increase their purchases of essential items. The average consumer said they expected to spend more on fresh produce, meat and dairy, and center-store categories (which include the items one might expect to find in the center of a grocery store, such as shelf-stable foods or frozen foods).
Clearly, the ongoing challenges from inflation are causing consumers to focus on essentials such as groceries, utilities, gas, rent/mortgages and other nonessentials.
Ongoing inflation does nothing to convince shoppers to part with their hard-earned discretionary income and spend it on furniture, especially better goods that typically come with higher tickets.
In fact, the ConsumerWise report shows that consumers continue to balance the higher costs from inflation by continuing to trade down.
Clearly, home furnishings is a sector that has its work cut out for it.
As I am writing this column, I have been informed that a number of retailers, especially larger and big-box retailers, have pulled the plug on previously written orders resulting in suppliers scrambling to offload containers of furniture they assumed was sold and off the books.
It looks like we may be facing a long, hot summer.
