NATIONAL REPORT — Lower gas prices led consumer confidence to improve by 12 percentage points in the fourth quarter of 2014, but the picture isn't completely rosy for Americans.
According to Nielsen's Consumer Confidence Index, Americans are feeling good again about their personal finances (up 6 percentage points); immediate spending intentions (up 8 percentage points); and feeling it was a good time to spend (up 9 percentage points).
"Consumers appear more upbeat than other regions going into 2015. Declining unemployment, falling oil prices and continued low interest rates place consumers in the world’s largest economy in a better position to spend than in recent years,” said Louise Keely, senior vice president, Nielsen.
However, while these positive factors definitely bolstered the U.S. economy in 2014, a separate IRI MarketPulse report revealed U.S. consumers remain concerned about their economic futures and are cautious about their spending habits because average hourly wages are not rising with the improved economy.
“It’s a mixed bag of both positive and negative forces at play in the CPG (consumer packaged goods) industry today,” said Susan Viamari, editor of Thought Leadership, IRI. “Though we see many positives, a huge negative is the fact that income remains quite stagnant, so many consumers still don’t earn enough money to ease budgetary strain. In fact, our latest MarketPulse survey uncovered that 22 percent of consumers are still having difficulty in affording needed groceries, which is unchanged from a year ago.”
IRI stressed that not all indicators are negative. Shopper sentiment maintained an overall upward trend for the entire year of 2014. Millennial consumer confidence was especially strong, with 36 percent of those aged 18 to 34 saying their financial situation has improved in the past year, much higher than the general population.
"This is great news, since this group has certainly struggled during much of the economic downturn," stated IRI's report.
In all, IRI's fourth-quarter MarketPulse revealed 33 percent of surveyed Americans believed their financial situation is worse now than a year ago; 47 percent believe their situation is the same; and 20 percent feel their position has improved during the past year.
"The U.S. economy made significant positive strides in 2014, but the improvements are taking longer to ripple through the population than expected," concluded Viamari. "To activate shoppers in 2015, CPG marketers are going to have to keep playing the affordability card — giving consumers the products and tools they need to stretch their CPG dollars while still living life to the fullest."