U.S. consumers are starting to see a rosier future. According to new fourth-quarter 2011 global consumer confidence findings released by The Nielsen Co., 49 percent of U.S. respondents believe their personal finance prospects will be good or excellent over the next 12 months.
The Q4 results were the highest for 2011 and marked a six-percentage-point increase over the third quarter of 2011. The Nielsen Global Survey of Consumer Confidence and Spending Intentions, conducted between Nov. 23 and Dec. 9, also found that the number of U.S. respondents who described their job prospects as “bad” dropped from 28 percent to 19 percent between the third and fourth quarters of last year.
Overall, the U.S. consumer confidence index rose six points from 77 to 83 for Q4, in a quarter that saw 60 percent of participating markets register index declines. The Nielsen Global Survey of Consumer Confidence and Spending Intentions, established in 2005, tracks consumer confidence, major concerns and spending intentions among more than 28,000 Internet consumers in 56 countries. Consumer confidence levels above and below a baseline of 100 indicate degrees of optimism and pessimism.
Despite the improvements, almost one-third (32 percent) of U.S. respondents still reported having no spare cash in the fourth quarter. For those with spare cash, savings (34 percent) and paying off debts (31 percent) scored highest in terms of their plans for the money. Investments ranked last as an option for spare cash. Retirement and stocks/mutual funds each earned only 8 percent of respondents’ votes.
“As it relates to the economy, the No. 1 concern for consumers is jobs. Recent gains in the U.S. labor market are positively impacting sentiment, but the number of Americans still unemployed or struggling to make ends meet will continue to be a drag on spending in 2012,” said James Russo, VP of global consumer insights for Schaumburg, Ill.-based Nielsen. “Other macro trends aren’t helping either, including a weak housing sector, elevated commodity prices and slow wage growth. However, if the economy can sustain growth of 250,000 jobs per month, it will lower the unemployment rate and not only impact sentiment, but spending.”
The survey found that cutting back on gas and electricity (64 percent), new clothes (58 percent) and out-of-home entertainment (56 percent) were U.S. consumers’ top three strategies for saving money. When asked what they’ll continue to do when economic conditions improve, consumers' top three answers were to cut back on gas/electricity (54 percent), cut back on take-home meals (34 percent) and switch to cheaper grocery brands (29 percent).