Recently released data from Nielsen's Consumer Confidence Index shows relatively stable global confidence, with the United States gaining more confidence in the second quarter.
Despite uncertainty and contrasting rhetoric around key economic issues, the American consumers remained optimistic in the second quarter with a three-point confidence increase to reach a score of 111. In contrast, global consumer confidence remained steady at 98.
The index is fielded quarterly in 63 countries to measure perceptions of local job prospects, personal finances, immediate spending intentions, and related economic issues. Levels above and below the baseline score of 100 indicate optimism and pessimism respectively.
The United States demonstrates high optimism with a strong score of 111. Still, in spite of low unemployment rates and increased consumer spending, not all sectors are seeing the same growth.
“With U.S. unemployment at a rate of five percent or below since August 2015 and the housing market continuing to expand, American consumers have been spending,” says Louise Keely, senior v.p., Nielsen, and president, The Demand Institute. “However, not all sectors are benefiting equally. Packaged goods retail sectors and value-oriented retail channels, in particular, are experiencing slower growth than that of overall consumer spending.”
United States highlights
Confidence in the United States rose in the second quarter. The country has been at or above the optimism baseline of 100 for more than two years.
Half of respondents were confident that personal finances (70 percent), immediate spending intentions (58 percent), and job prospects (56 percent) would be good or excellent in the next 12 months.
Consumers listed the economy (34 percent) as their biggest concern, and anxiety about political stability increased 10 percent points from the same time last year to 14 percent this year.
Global economic growth is sluggish, with wide variation in growth rates, says Keely.
Numerous countries have been affected by economic concerns such as weak commodity prices and job prospects, as well as political concerns such as terrorism and political stability.
"Still, in many markets, consumer spending continues to be a bright spot," she says. "Consumer confidence has remained stable on average over the past several quarters.”
One of the largest slips in confidence is in India, where the score dropped six points to 128 in response to costlier fuel, rising inflation, and monsoon concerns. The results echo cautious views from fast-moving consumer goods companies reporting slow sales growth in the April-June quarter.
Japan's confidence decreased four points to 69, capping out the country's fourth consecutive quarter of declining scores due to weak consumption and wage growth.
At 106, China's score saw a one-point increase.
Latin America remained unchanged at 78. The Middle East/Africa also remained stable at 89.
In Europe, Germany's confidence saw a one-point decrease to 96.
Global confidence remains just short of the optimism baseline of 100. At 98, however, the scores are holding steady.